Does APR include PMI or escrow?

No. APR here includes points and lender fees only.

Adjustable or interest-only loans?

Not modeled; this assumes a fixed-rate, fully amortizing loan.

Prepayment penalties?

Not included. Check lender disclosures if a penalty applies.

Why is APR higher than the note rate?

Points/fees increase the effective cost, raising the APR above the note rate.

Can APR be lower than the note rate?

Yes, if you receive enough credits to offset fees, the effective APR could be lower.

finance calculator

Mortgage APR Calculator

See the true APR on your mortgage by including points and lender fees, plus the monthly payment and total finance charges.

Results

Monthly payment (P&I): $2,528
Amount financed (after points/fees): $393,500
Total finance charges: $6,500
Total of payments: $910,178
APR (annualized): 6.20%

How to use this calculator

Enter loan amount, note rate, and term.
Enter points (as % of loan) and other lender fees.
Review monthly payment, amount financed, total finance charges, total of payments, and APR.

Inputs explained

Points: Discount points as a % of the loan (e.g., 1 point = 1%).
Other fees: Lender/underwriting/processing fees included in APR; excludes escrows.

How it works

We subtract points and fees from the loan amount to get amount financed.

Monthly payment uses the note rate on the full loan amount. APR is solved by finding the rate that equates the amount financed to the payment stream over the term.

Formula

Amount financed = Loan − (Points + Fees)
Payment = note rate amortization on full loan
APR solved as the periodic rate that discounts the payment stream to the amount financed, annualized.

When to use it

Comparing loan estimates across lenders on a consistent APR basis.
Seeing how points/credits change APR vs the note rate.
Understanding total finance charges beyond principal and interest.

Tips & cautions

Use the same inputs across lender quotes to compare APRs fairly.
If you’re not buying points, set points to 0; include only lender fees that factor into APR.
APR includes finance charges but not escrowed taxes/insurance/PMI.
Assumes fixed-rate, fully amortizing loan with monthly payments.
Does not include PMI, taxes, insurance, HOA, or prepayment penalties.
Uses a simplified APR solve; minor differences may exist vs lender disclosures.

Worked examples

$400k loan, 6.5% note, 30 years, 1% points, $2,500 fees

Payment ≈ $2,528
Amount financed ≈ $393,500
APR ≈ 6.66%

$300k loan, 6.75% note, 30 years, 0.5% points, $1,500 fees

Payment ≈ $1,946
Amount financed ≈ $297,000
APR ≈ 6.85%

Deep dive

This mortgage APR calculator shows the true APR by including points and lender fees, alongside your note rate, payment, and total finance charges.

Use it to compare mortgage offers on an apples-to-apples APR basis.

FAQs

Does APR include PMI or escrow?: No. APR here includes points and lender fees only.
Adjustable or interest-only loans?: Not modeled; this assumes a fixed-rate, fully amortizing loan.
Prepayment penalties?: Not included. Check lender disclosures if a penalty applies.
Why is APR higher than the note rate?: Points/fees increase the effective cost, raising the APR above the note rate.
Can APR be lower than the note rate?: Yes, if you receive enough credits to offset fees, the effective APR could be lower.

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Estimates only. Lender APR disclosures may vary slightly based on fee treatment and compounding conventions. Verify with your lender before locking a rate.