Skip to content
freescalculator.com

APR Calculator

Calculate the true Annual Percentage Rate (real APR) of a loan or mortgage, factoring in upfront closing costs, discount points, origination fees, and PMI.

$
years
months
%
$

Fees added directly to the principal loan balance and repaid over time rather than paid out-of-pocket at closing.

$

Total fees, points, and closing charges that the borrower pays out-of-pocket at loan signing.

Real APR: 6.563%

Nominal interest rate: 6%

Loan Cost Summary

Amount Financed $100,000.00
Upfront Out-of-Pocket Fees $2,500.00
Payment Every Month $1,110.21
Total of 120 Payments $133,224.60
Total Interest $33,224.60
All Payments and Fees $135,724.60

Total Cost Breakdown

Total Outlay $135,725
Principal
$100,000 74%
Interest
$33,225 24%
Fees
$2,500 2%

Amortization Progression Schedule

All 120 installments
# Beg. Balance Payment Principal Interest End. Balance
1 $100,000.00 $1,110.21 $610.21 $500.00 $99,389.79
2 $99,389.79 $1,110.21 $613.26 $496.95 $98,776.54
3 $98,776.54 $1,110.21 $616.32 $493.88 $98,160.22
4 $98,160.22 $1,110.21 $619.40 $490.80 $97,540.81
5 $97,540.81 $1,110.21 $622.50 $487.70 $96,918.31
6 $96,918.31 $1,110.21 $625.61 $484.59 $96,292.70
7 $96,292.70 $1,110.21 $628.74 $481.46 $95,663.96
8 $95,663.96 $1,110.21 $631.89 $478.32 $95,032.07
9 $95,032.07 $1,110.21 $635.04 $475.16 $94,397.03
10 $94,397.03 $1,110.21 $638.22 $471.99 $93,758.81
11 $93,758.81 $1,110.21 $641.41 $468.79 $93,117.40
12 $93,117.40 $1,110.21 $644.62 $465.59 $92,472.78
13 $92,472.78 $1,110.21 $647.84 $462.36 $91,824.94
14 $91,824.94 $1,110.21 $651.08 $459.12 $91,173.86
15 $91,173.86 $1,110.21 $654.34 $455.87 $90,519.52
16 $90,519.52 $1,110.21 $657.61 $452.60 $89,861.91
17 $89,861.91 $1,110.21 $660.90 $449.31 $89,201.02
18 $89,201.02 $1,110.21 $664.20 $446.01 $88,536.82
19 $88,536.82 $1,110.21 $667.52 $442.68 $87,869.30
20 $87,869.30 $1,110.21 $670.86 $439.35 $87,198.44
21 $87,198.44 $1,110.21 $674.21 $435.99 $86,524.23
22 $86,524.23 $1,110.21 $677.58 $432.62 $85,846.64
23 $85,846.64 $1,110.21 $680.97 $429.23 $85,165.67
24 $85,165.67 $1,110.21 $684.38 $425.83 $84,481.29
25 $84,481.29 $1,110.21 $687.80 $422.41 $83,793.49
26 $83,793.49 $1,110.21 $691.24 $418.97 $83,102.26
27 $83,102.26 $1,110.21 $694.69 $415.51 $82,407.56
28 $82,407.56 $1,110.21 $698.17 $412.04 $81,709.40
29 $81,709.40 $1,110.21 $701.66 $408.55 $81,007.74
30 $81,007.74 $1,110.21 $705.17 $405.04 $80,302.57
31 $80,302.57 $1,110.21 $708.69 $401.51 $79,593.88
32 $79,593.88 $1,110.21 $712.24 $397.97 $78,881.64
33 $78,881.64 $1,110.21 $715.80 $394.41 $78,165.85
34 $78,165.85 $1,110.21 $719.38 $390.83 $77,446.47
35 $77,446.47 $1,110.21 $722.97 $387.23 $76,723.50
36 $76,723.50 $1,110.21 $726.59 $383.62 $75,996.91
37 $75,996.91 $1,110.21 $730.22 $379.98 $75,266.69
38 $75,266.69 $1,110.21 $733.87 $376.33 $74,532.82
39 $74,532.82 $1,110.21 $737.54 $372.66 $73,795.28
40 $73,795.28 $1,110.21 $741.23 $368.98 $73,054.05
41 $73,054.05 $1,110.21 $744.93 $365.27 $72,309.11
42 $72,309.11 $1,110.21 $748.66 $361.55 $71,560.46
43 $71,560.46 $1,110.21 $752.40 $357.80 $70,808.05
44 $70,808.05 $1,110.21 $756.16 $354.04 $70,051.89
45 $70,051.89 $1,110.21 $759.95 $350.26 $69,291.94
46 $69,291.94 $1,110.21 $763.75 $346.46 $68,528.20
47 $68,528.20 $1,110.21 $767.56 $342.64 $67,760.63
48 $67,760.63 $1,110.21 $771.40 $338.80 $66,989.23
49 $66,989.23 $1,110.21 $775.26 $334.95 $66,213.97
50 $66,213.97 $1,110.21 $779.14 $331.07 $65,434.84
51 $65,434.84 $1,110.21 $783.03 $327.17 $64,651.81
52 $64,651.81 $1,110.21 $786.95 $323.26 $63,864.86
53 $63,864.86 $1,110.21 $790.88 $319.32 $63,073.98
54 $63,073.98 $1,110.21 $794.84 $315.37 $62,279.14
55 $62,279.14 $1,110.21 $798.81 $311.40 $61,480.34
56 $61,480.34 $1,110.21 $802.80 $307.40 $60,677.53
57 $60,677.53 $1,110.21 $806.82 $303.39 $59,870.71
58 $59,870.71 $1,110.21 $810.85 $299.35 $59,059.86
59 $59,059.86 $1,110.21 $814.91 $295.30 $58,244.96
60 $58,244.96 $1,110.21 $818.98 $291.22 $57,425.98
61 $57,425.98 $1,110.21 $823.08 $287.13 $56,602.90
62 $56,602.90 $1,110.21 $827.19 $283.01 $55,775.71
63 $55,775.71 $1,110.21 $831.33 $278.88 $54,944.39
64 $54,944.39 $1,110.21 $835.48 $274.72 $54,108.90
65 $54,108.90 $1,110.21 $839.66 $270.54 $53,269.24
66 $53,269.24 $1,110.21 $843.86 $266.35 $52,425.38
67 $52,425.38 $1,110.21 $848.08 $262.13 $51,577.30
68 $51,577.30 $1,110.21 $852.32 $257.89 $50,724.99
69 $50,724.99 $1,110.21 $856.58 $253.62 $49,868.41
70 $49,868.41 $1,110.21 $860.86 $249.34 $49,007.54
71 $49,007.54 $1,110.21 $865.17 $245.04 $48,142.38
72 $48,142.38 $1,110.21 $869.49 $240.71 $47,272.88
73 $47,272.88 $1,110.21 $873.84 $236.36 $46,399.04
74 $46,399.04 $1,110.21 $878.21 $232.00 $45,520.83
75 $45,520.83 $1,110.21 $882.60 $227.60 $44,638.23
76 $44,638.23 $1,110.21 $887.01 $223.19 $43,751.22
77 $43,751.22 $1,110.21 $891.45 $218.76 $42,859.77
78 $42,859.77 $1,110.21 $895.91 $214.30 $41,963.86
79 $41,963.86 $1,110.21 $900.39 $209.82 $41,063.48
80 $41,063.48 $1,110.21 $904.89 $205.32 $40,158.59
81 $40,158.59 $1,110.21 $909.41 $200.79 $39,249.18
82 $39,249.18 $1,110.21 $913.96 $196.25 $38,335.22
83 $38,335.22 $1,110.21 $918.53 $191.68 $37,416.69
84 $37,416.69 $1,110.21 $923.12 $187.08 $36,493.57
85 $36,493.57 $1,110.21 $927.74 $182.47 $35,565.83
86 $35,565.83 $1,110.21 $932.38 $177.83 $34,633.45
87 $34,633.45 $1,110.21 $937.04 $173.17 $33,696.42
88 $33,696.42 $1,110.21 $941.72 $168.48 $32,754.69
89 $32,754.69 $1,110.21 $946.43 $163.77 $31,808.26
90 $31,808.26 $1,110.21 $951.16 $159.04 $30,857.10
91 $30,857.10 $1,110.21 $955.92 $154.29 $29,901.18
92 $29,901.18 $1,110.21 $960.70 $149.51 $28,940.48
93 $28,940.48 $1,110.21 $965.50 $144.70 $27,974.98
94 $27,974.98 $1,110.21 $970.33 $139.87 $27,004.65
95 $27,004.65 $1,110.21 $975.18 $135.02 $26,029.47
96 $26,029.47 $1,110.21 $980.06 $130.15 $25,049.41
97 $25,049.41 $1,110.21 $984.96 $125.25 $24,064.45
98 $24,064.45 $1,110.21 $989.88 $120.32 $23,074.57
99 $23,074.57 $1,110.21 $994.83 $115.37 $22,079.73
100 $22,079.73 $1,110.21 $999.81 $110.40 $21,079.93
101 $21,079.93 $1,110.21 $1,004.81 $105.40 $20,075.12
102 $20,075.12 $1,110.21 $1,009.83 $100.38 $19,065.29
103 $19,065.29 $1,110.21 $1,014.88 $95.33 $18,050.41
104 $18,050.41 $1,110.21 $1,019.95 $90.25 $17,030.46
105 $17,030.46 $1,110.21 $1,025.05 $85.15 $16,005.41
106 $16,005.41 $1,110.21 $1,030.18 $80.03 $14,975.23
107 $14,975.23 $1,110.21 $1,035.33 $74.88 $13,939.90
108 $13,939.90 $1,110.21 $1,040.51 $69.70 $12,899.40
109 $12,899.40 $1,110.21 $1,045.71 $64.50 $11,853.69
110 $11,853.69 $1,110.21 $1,050.94 $59.27 $10,802.75
111 $10,802.75 $1,110.21 $1,056.19 $54.01 $9,746.56
112 $9,746.56 $1,110.21 $1,061.47 $48.73 $8,685.09
113 $8,685.09 $1,110.21 $1,066.78 $43.43 $7,618.31
114 $7,618.31 $1,110.21 $1,072.11 $38.09 $6,546.20
115 $6,546.20 $1,110.21 $1,077.47 $32.73 $5,468.72
116 $5,468.72 $1,110.21 $1,082.86 $27.34 $4,385.86
117 $4,385.86 $1,110.21 $1,088.28 $21.93 $3,297.58
118 $3,297.58 $1,110.21 $1,093.72 $16.49 $2,203.87
119 $2,203.87 $1,110.21 $1,099.19 $11.02 $1,104.68
120 $1,104.68 $1,110.21 $1,104.68 $5.52 $0.00

1 Interest Rate vs. Annual Percentage Rate (APR)

One of the most frequent points of confusion for borrowers is distinguishing between the note interest rate and the Annual Percentage Rate (APR). While related, they represent very different aspects of borrowing:

Nominal Interest Rate (Note Rate)

The exact percentage fee a lender charges against the outstanding principal balance each period:

Determines Your Monthly Principal & Interest Payment

It ignores all origination fees, appraisal charges, title insurance, discount points, and third-party closing costs.

Real Annual Percentage Rate (APR)

The holistic, annualized effective cost of credit, amortizing all mandatory lender charges across the loan life:

APR = Nominal Rate + (Total Upfront Fees Amortized Over Term)

Under the federal Truth in Lending Act (TILA), lenders are legally required to disclose APR so borrowers can compare true loan costs.

2 How Fees Impact Your Effective APR

Not every closing cost is considered a finance charge under federal guidelines. Understanding which fees raise your APR helps identify high-markup loan offers:

Fee Category Typical Costs Included Included in APR Calculation?
Lender Finance Charges Loan origination, underwriting fees, processing fees, document preparation fees Yes (Always)
Discount Points Prepaid interest purchased upfront to permanently lower the ongoing note rate Yes (Always)
Mortgage Insurance (PMI/MIP) Private Mortgage Insurance premiums paid until the loan reaches 80% loan-to-value Yes
Third-Party Incidental Costs Home inspection, property survey, title search, transfer taxes, attorney legal fees Generally Excluded
Prepaids & Escrow Reserves Prepaid homeowner insurance and upfront county property tax escrow reserves Excluded (You would pay them regardless of borrowing)

3 Upfront Out-of-Pocket Fees vs. Financed (Loaned) Fees

When structuring a loan, borrowers can choose whether to pay closing fees directly out of pocket or finance them into the principal balance:

Paying Fees Upfront (Out-of-Pocket)

  • Reduces net cash disbursed to you upon loan origination.
  • Keeps your monthly payments and total accrued interest lower over the loan term.
  • Requires higher liquid savings on closing day.
  • Directly increases the spread between nominal interest rate and APR.

Financing Fees into the Loan (Loaned Fees)

  • Minimizes closing-day cash requirements (popular in "no-closing-cost" refinances).
  • Increases the principal balance on which interest compounds over time.
  • Results in higher monthly payments and greater lifetime interest expense.
  • Slightly lowers the nominal APR because fees are repaid over decades rather than surrendered on day one.

4 When APR Can Be Misleading

1

Prepayment & Early Refinancing

APR assumes you will keep the loan for the full stated term (e.g., 30 years). If you sell or refinance after 5 or 7 years, upfront points and lender fees are amortized over a much shorter window, making your true annualized borrowing cost significantly higher than the disclosed APR.

2

Adjustable-Rate Mortgages (ARMs)

On hybrid ARMs (e.g., 5/1 or 7/1 ARMs), the APR is calculated based on introductory teaser rates and preset regulatory index formulas. It cannot predict future benchmark interest rate shifts when the mortgage resets.

3

Balloon Payments & Teaser Loans

Loans with large balloon balances or non-standard amortization structures can mask total risk behind a seemingly competitive APR figure. Always inspect the comprehensive amortization schedule alongside the APR.

5 Frequently Asked Questions

Can the APR ever be lower than the interest rate?

Yes, in situations where lenders provide a negative closing cost credit (lender rebate) that exceeds all upfront finance charges, or on adjustable-rate mortgages where current market indexes project a rate decrease at adjustment. For standard fixed-rate loans with positive closing fees, APR is always higher than the note rate.

What is the difference between APR and APY?

APR (Annual Percentage Rate) reflects the annualized cost of borrowing money, ignoring the effect of intra-year compounding on interest owed. APY (Annual Percentage Yield) or EAR (Effective Annual Rate) factors in compound interest and is predominantly used to quote earnings on savings accounts and investment yields.

Do discount points always lower the APR?

Not necessarily. Buying discount points lowers the ongoing note rate, but paying points increases upfront finance charges. If the rate reduction is substantial over a full 30-year schedule, the APR will drop; however, if you plan to keep the mortgage for only a few years, points will actually increase your true effective cost of borrowing.

How does Private Mortgage Insurance (PMI) stop affecting APR?

Under the Homeowners Protection Act of 1998, conventional lenders must automatically cancel PMI once the loan balance drops to 78% of the original home value, and borrowers can request cancellation at 80% LTV. Our calculator factors in the exact month PMI terminates to determine your true weighted APR.

Understanding your calculation

Method, example and limitations

How the calculation works

An APR estimate relates the payment stream to net loan proceeds after the included financing charges. Solving for the implied rate shows how fees change borrowing cost.

Example to check

A loan with a stated principal of 1,000 and an upfront finance fee of 50 provides 950 of net proceeds; unchanged repayments imply a higher effective borrowing rate.

Before using the result

Legal APR calculations specify which charges and conventions apply. The estimate is not a substitute for the lender’s official disclosure.

CFPB: Interest rate and APR · Calculation methodology · Report a result that needs review