APR Calculator

The interest rate tells you what you pay on the balance. The APR also counts upfront fees, giving you one number for comparing loans. Enter the rate, term and fees to find the APR.

APR6.646%vs. 6.5% interest rate

Monthly payment: $1,896.20
Amount financed (loan minus fees): $295,500.00
Spread between APR and rate: 0.146%
Total finance charge: $387,132.00

APR spreads upfront fees over the full term. If you sell or refinance early, the effective cost of those fees is higher than the APR shows. This is an estimate; your Loan Estimate shows the official APR.

Interest rate vs. APR

Under the Truth in Lending Act, lenders must disclose an APR alongside the rate. The APR is the rate at which your monthly payments would repay only the money you actually receive after finance charges. When a loan has fees, the APR is higher than the interest rate, and the gap shows how much those fees cost.

Example

A $300,000, 30-year loan at 6.5% has a payment of $1,896.20. If you pay $4,500 in points and lender fees, you effectively received $295,500 for the same payments, so the APR is about 6.646%.

Using APR to compare loans

Compare loans of the same term and type. A loan with a lower rate but large fees can have a higher APR than a no-fee loan. Remember that APR assumes you keep the loan to the end: if you plan to sell or refinance in a few years, upfront fees cost you more per year than the APR suggests.

Frequently asked questions

Which fees count toward APR?

Finance charges such as origination fees, discount points, some broker fees and mortgage insurance premiums. Many third-party costs, such as appraisal, title and recording fees on a mortgage, are generally excluded.

Is APR the same as APY?

No. APY includes compounding and is used for savings accounts. APR is the yearly rate on a loan without compounding, adjusted for fees.

Why does my Loan Estimate show a different APR?

The official APR follows detailed federal rules about which charges count and how odd first periods are handled. This calculator is a close estimate for comparing offers.

Sources

Last reviewed October 25, 2026. How we review and test pages.

PmtCalc provides estimates for education and planning only. Results are not an offer of credit, a loan approval, or financial, tax or legal advice. Actual terms depend on the lender and your situation. How we calculate and test these results.