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APR vs Interest Rate Calculator
Your interest rate determines your payment. Your APR folds the cost of getting the loan into a single annualized number so two offers can be compared on equal footing.
A quarter-point lower rate with $6,000 more in fees is not a better deal. This shows the gap in both directions.
Your numbers
Origination, points, and other finance charges — not taxes or prepaids.
Your results
Offer B has the lower APR
0.074% apart
- Offer A — rate
- 6.5%
- Offer A — APR
- 6.658%
- Offer B — rate
- 6.25%
- Offer B — APR
- 6.585%
- 5-year cost, Offer A
- $126,557
- 5-year cost, Offer B
- $129,218
- 5-year difference
- $2,661 more
Payments plus fees
| Offer A | Offer B | |
|---|---|---|
| Rate | 6.5% | 6.25% |
| APR | 6.658% | 6.585% |
| Fees | $5,200 | $11,000 |
| Monthly P&I | $2,023 | $1,970 |
| 5-year total | $126,557 | $129,218 |
What happens if you change this
Offer B has the lower rate (6.25% vs 6.5%) but $5,800 more in fees, which is why its APR is 6.585%. Over five years — closer to how long most people actually keep a loan — Offer A costs $2,661 less. APR assumes you keep the loan the full 30 years, so on a shorter hold the five-year comparison is the more honest one.
Ready for real numbers?
Estimates get you oriented. A pre-approval gets you an offer sellers take seriously.
Related calculators
- Rate Buy-Down CalculatorDecide whether paying points to lower your rate is worth it — and when you'd get the money back.
- Closing Cost EstimatorEstimate lender fees, title, transfer tax and prepaid escrows — the costs that surprise buyers most.
- Refinance CalculatorFind your true break-even point — the month the savings finally outrun the cost of refinancing.
- Mortgage Payment CalculatorSee your full monthly payment — principal, interest, taxes, insurance and mortgage insurance — not just principal and interest.
Questions people ask
- Why is my APR higher than my rate?
- Because APR spreads your loan costs — origination, points, and certain fees — across the loan term. A higher gap means higher upfront cost.
- Should I always pick the lower APR?
- Not necessarily. APR assumes you hold the loan for the full term. If you'll move or refinance in five years, compare total five-year cost instead.
Estimates for education only — not a loan approval, rate quote, or commitment to lend. Actual figures depend on credit, property, program guidelines, and market conditions at the time of lock. Corie Adams · NMLS #1875205 · Network Funding, LP · NMLS ID #2279 · Equal Housing Opportunity.