APR Calculator
Find the true annual percentage rate (APR) of a loan once upfront fees and points are folded into the note rate.
How it works
Find the monthly rate i where payment × (1 − (1 + i)^−n) ÷ i = loan − fees, then APR = i × 12
The note rate sets your payment, but APR reflects your real cost of borrowing. You repay based on the full loan, yet the fees mean you actually receive less cash up front. APR is the single rate that equates the present value of your payments to the amount you net after fees — always at or above the note rate. Lenders must disclose it so you can compare offers on equal footing.
Worked example
Borrow $200,000 at a 6% note rate over 30 years with $4,000 in fees. The payment is $1,199.10 on the full balance, but you only net $196,000. The APR that reconciles those is about 6.189% — the extra 0.19% is what the fees cost you in rate terms.
Frequently asked questions
Why is APR higher than the interest rate?
Because APR spreads your upfront fees and points across the loan as if they were extra interest. The note rate ignores fees; APR does not, so it is the truer cost of the loan.
Should I always pick the lowest APR?
Usually, for loans you will keep to term. But APR assumes you hold the loan the whole time — if you will refinance or sell early, paying points to lower the rate may not pay off, and a lower-fee, higher-rate option can win.
Does APR include every cost?
It includes finance charges like origination fees and points, but not third-party costs such as appraisals or title insurance in every case. Rules vary by loan type, so read the disclosure.
Related calculators
This is an educational estimate, not financial advice. Lenders use their own rounding, fees and terms — confirm exact figures with your lender or a licensed advisor.