**Differentiate between your mortgage interest rate and APR with ease**- Various financial institutions and brokerages may provide different interest rates and fees associated with borrowing money for a mortgage, making it difficult to understand exactly how much the loan will cost you. Therefore, the annual percentage rate on a mortgage is usually higher then the interest rate because it factors in mortgage points, as well as lender fees and broker fees, and any other upfront costs required for securing the mortgage loan. By summarizing these costs you can then understand the cost of borrowing more effectively then just assessing the interest rate alone.
- Further more, you may compare one loan’s APR alongside another loan’s APR to gain an accurate comparison of the total cost of borrowing and determine which mortgage loan is right for you.

**Using the Mortgage APR Calculator**- In order to use the mortgage APR calculator effectively, there is some information you should have immediately available. This includes your mortgage loan amount, term length, and interest rate. This calculator will also require knowledge of any mortgage points used to finalize the mortgage, along with the origination fee (also know as lender fee), and other costs such as prepayments or broker fees.
- When this is simply added to the mortgage APR calculator, you will be given detailed information on the cost of your mortgage payments, as well as your total payments including total interest and total closing costs, along with the calculated annual percentage rate.

**Is the annual percentage rate calculator accurate?**- The annual percentage rate will only be as accurate as the information provided. Different banks and lending institutions provide different interest rates and origination fees, while each brokerage may offer different service fees as well. It is easy to get the information confused between loans and creditors and possibly overlook or leave out valuable information; therefore, it is important to verify the figures you are supplying to get a precise calculation.
**How to use the mortgage APR calculator**- The annual percentage rate calculator is very easy to use, provided that you have all your mortgage details on hand, starting with the
**loan information.** - 1. On the first line of the calculator is the
**mortgage amount**where you simply add the original dollar value of the mortgage, you can even use the arrows to increase or decrease the dollar values easily. When comparing offers from different lenders this figure should remain unchanged. - 2. The second line of the calculator requires the
**term in years**, which is the amount of time required to repay the loan. The terms can be anywhere from 10 years up to as many as 50 years, with the most common term lengths on mortgage loans being generally 15 or 30 years. -
3. Next, the
**interest rate**is required on the third line. The interest rate will vary by lender, and can be heavily influenced by your credit score. Therefore, when you have a better credit score the banks will offer a better interest rate.

- The next part segment of the calculator will require information about the mortgage
**closing costs**. - 4. On the fourth line of the calculator is the
**origination fee percent**, which is the percentage amount charged by the creditor on the total mortgage amount, as a cost to borrow money. Most lenders and financial institutions charge a 1% origination fee on the loan, but this figure may be higher depending on the institution and risk level of the application. - As an example, a 1% origination fee on a $120,000 loan would be $1,200.
- 5. Following is the fifth line,
**points paid**. Here you may add any mortgage discount points that will be used to reduce the total mortgage interest rate. Mortgage points can generally be purchased at the cost of 1% of the original loan amount, and may be tax deductible unless utilized to pay a mortgage broker’s commission. - 6. Let’s continue to the sixth line where you may find the
**other fees to include**and thus you should add any additional costs required to secure the mortgage. This may include but is not limited to; down payments, prepaid expenses, and/or broker fees. - 7. Finally, you may request the
**amortization report**in an annual or monthly format through a simple multiple-choice selection.

**Your mortgage APR results**- Once these details have been added, you will be provided with some initial detailed information to the left of the calculator inputs. Here you will be provided with your calculated monthly
**mortgage payment**, along with**total payments**and**interest**on the loan, as well as**total closing costs**pertaining to the information you provided. - You may also find the total
**APR**on the mortgage loan here, which has been designed to help compare different mortgage loan options. - In some instances, a loan with a lower stated interest may be a bad value if the fees are too high, while a loan with a higher stated interest and reduced fees may actually be the better value.
- Following these calculations are helpful columns beneath the information inputs, such as the
**principle balance**chart. This chart visually outlines how the payments function towards reducing the principle balance on the mortgage for the specified term length in years. -
While the next column over is the
**payments schedule**which, provides an extensive amortization table providing a breakdown of the principle and interest payments throughout the term of the loan, along with total payments and ending principle balance in each instance. These payments will be itemized monthly or annually, reliant on your aforementioned selection. - All the columns are conveniently scalable in this table, should you require an improved view of the principle or interest payments, total payments, or ending principle balance. Additionally, you may effortlessly switch back and forth amongst amortization reports without disrupting any earlier inputs or calculations
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