APR (annual percentage rate)
The yearly cost of a loan including the interest rate plus certain fees, such as points and origination charges. It is usually higher than the interest rate and makes it easier to compare offers from different lenders.
Also called: annual percentage rate
Related terms
The percentage a lender charges to borrow money, used to figure the interest part of each payment. It does not include fees, which is why the APR is often higher.
Upfront fees paid to the lender at closing to lower the interest rate. One point equals 1% of the loan amount. Paying points makes sense mainly if you keep the loan long enough to recover the cost.
A loan used to buy real estate, with the property pledged as security. If the borrower stops paying, the lender can foreclose. Some states use a deed of trust instead of a mortgage document, but people call both a mortgage.
A fee the lender charges to process and fund a loan, often a percentage of the loan amount. It appears on the Loan Estimate and is included in the APR.
A standard three-page form a lender must give within three business days of a loan application, showing the estimated rate, payment and closing costs. It makes offers from different lenders easy to compare.