Why Use The Mortgage APR Calculator?
APR is a standard calculation intended to help borrowers to make true comparisons between different lending plans. When you obtain a mortgage, the lender will quote the interest rate and the APR, often separately. The APR is defined as an annualized cost of credit. This means that the APR is the rate that you will actually be paying on your mortgage because this figure includes upfront costs such as points, closing costs, and prepaid interest.
This is important because a loan which has a lower interest rate may seem like the best deal, but if the fees are too high that saving can be quickly canceled out. A loan with a slightly higher interest rate but much lower fees may well represent greater value for money over the course of your mortgage term. The APR should take all of this into account and provide you with a reliable benchmark to measure alternative plans against.
However, you wouldn’t usually have that information available to you until much later in the process – which is why we have provided the Mortgage APR Calculator to help you! By inputting the relevant details into the calculator and finding out your plan’s APR, you can ensure that you are fully informed about the potential monthly costs of your mortgage so there are no nasty surprises.
How To Use The Mortgage APR Calculator
Not sure where to start? Let us help you:
- Input the amount you are intending to borrow in the Mortgage amount box, or use the sliders if you prefer
- Select the number of years you will take to repay the loan from the drop-down menu
- Input your estimated Interest rate
- Click Closing Costs to expand the section and add the necessary information – if you don’t know, leave the value that is already there as these are indicative of the market average
- Click Calculate to see your APR
- Click View Report to see more details, including a projection graph showing how quickly your debt will decrease.
Who is this Calculator for?
This calculator is most useful if you:
- Are working to a tight budget and need to know exactly how much you can afford
- Want to compare the true total monthly payment required from two or more providers (for the best way to do this, click Get FREE Quote)
- Want to double-check that your potential lender is making you a fair offer.
What’s the difference between a monthly payment and the APR?
As the APR includes other costs besides the actual amount of the mortgage, it is higher than the interest rate that is used to calculate the monthly mortgage payments. Following the Mortgage Disclosure Improvement Act (MDIA) of 2008, mortgage lenders are required by law to disclose the APR to potential borrowers when quoting the interest rate of a plan.
Now I know what my APR should be, what’s next?
The next step you are going to want to take is to Get a FREE Quote. Just answer a few simple questions, and quickly receive offers from various mortgage lenders. The best part; we provide this service completely FREE of charge. Make use of it today – there’s nothing to lose and everything to gain!
Mortgage APR Calculator Overview
When you obtain a mortgage you will hear the lender quote an interest rate and the APR. APR stands for the annual percentage rate, which is defined as an annualized cost of credit. This means that the APR is the rate that you will really be paying on your mortgage because this figure includes upfront costs such as points, closing costs, and prepaid interest. Mortgage lenders are required by law to disclose the APR to borrowers when quoting the interest rate. Because the APR includes other costs besides the actual amount of the mortgage, it is higher than the interest rate that is used to calculate the monthly mortgage payments.