Rate vs. APR
By Samprit Biswas, editor · Updated October 8, 2026
A mortgage has two rates. The rate, or note rate, sets your monthly payment. The annual percentage rate (APR) adds the lender's charges, such as points and fees, spread over the loan, so you can compare offers that charge in different ways.
Why the APR is higher
The APR counts what you pay to get the loan, not only the interest. Spread over the loan's life, those charges lift the APR above the rate. A loan with no charges at all would have an APR equal to its rate.
Which to compare
Compare APRs across lenders for the same loan: a lower rate bought with more points can come with a higher APR. Federal rules, Regulation Z, make an ad that states a rate show its APR beside it, as prominently.
Where the APR can mislead
The APR assumes you keep the loan for its whole term. If you may sell or refinance in a few years, the upfront charges weigh more than the APR shows, so compare the closing costs too. An adjustable rate's APR assumes the rate resets after its fixed years, which is why it sits far above its starting rate: see Fixed vs. adjustable rate.
On this site
Every rate we show has its APR beside it, at the same size, both at the points typical for that loan. Discount points shows what other points do to each.
How to cite this page
InfinityRateWatch. "Rate vs. APR." https://infinityratewatch.com/learn/rate-vs-apr/. Data as of Oct 8, 2026.