How does the APR Calculator work?

APR includes: interest rate + origination fees + broker fees + mortgage points Then: APR = (fees + total interest) / (loan amount × loan term in years) × 100 Then: A loan with a lower rate but high fees can have a higher APR than a higher-rate loan with no fees Then: Use APR when comparing loans; use interest rate to calculate monthly payments.

Can you give an example of how to use the APR Calculator?

Example: Input $200,000 loan, 6.5% rate, $4,000 fees, 30 years gives a result of APR ≈ 6.72% (Fees add ~0.22% to effective rate).

Is the APR Calculator free to use?

Yes — completely free with no registration, download, or subscription required. All calculations happen instantly in your browser.

How accurate is the APR Calculator?

Our APR Calculator uses verified mathematical formulas and is accurate to multiple decimal places. Results are calculated in real-time using the same methods used by professionals.

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APR Calculator

Currency:

Loan Amount

Nominal Rate

Fees / Points

Term (months)

APR (Annual Percentage Rate) is the true annual cost of borrowing — it includes the interest rate plus all fees and charges expressed as a yearly percentage. Unlike the stated interest rate, APR lets you compare loans on an apples-to-apples basis.

Feature	Interest Rate	APR
What it includes	Interest only	Interest + all fees
Used for	Calculating monthly payment	Comparing loan total cost
Legal requirement	Must be disclosed	Must be disclosed (TILA)
Always higher?	—	APR ≥ interest rate (usually)
Best when comparing	Same-fee loans	Any loans

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Pro Tip

For short-term loans (refinancing in <5 years), a lower rate with higher fees might be worse than a higher rate with no fees. Always calculate the break-even point.

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Did You Know?

The Truth in Lending Act (TILA) of 1968 requires lenders to disclose the APR to prevent deceptive lending. Before TILA, lenders could advertise a low rate while burying fees in the fine print.

References

›Annual percentage rate — Wikipedia

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