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APR Calculator

Real APR includes lender fees and points so you can compare offers fairly. Use the General APR and Mortgage APR tools below to see payments, total interest, and the true cost of borrowing.

General APR Calculator
Real APR: 6.563%
Amount Financed$100,000.00
Upfront 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
Mortgage APR Calculator
Real APR: 6.339%
Loan Amount$280,000.00
Down Payment$70,000.00
Monthly Pay (principal & interest)$1,724.01
Total of 360 Payments$620,642.94
Total Interest (P&I)$340,642.94
Points + Fees (upfront)$2,600.00

How to interpret APR results

APR is the interest rate that exactly discounts all future payments (and recurring charges) back to the net cash you receive after upfront costs. It lets you compare loans with different fee structures on an apples-to-apples basis. A lower APR generally means a cheaper loan, but term length, prepayment plans, and PMI/insurancecan change the picture.

  • Short vs. long terms: Shorter terms often show a higher payment but can still have a lower APR because you pay interest for fewer months.
  • Points & fees: Paying more upfront tends to lower the interest rate but raises the breakeven time. Refinance or move early and you may not recover the points.
  • PMI: Mortgage insurance behaves like an extra monthly fee and can push APR higher until it drops off.

How APR is calculated (overview)

We treat the loan from the borrower’s perspective: at time zero you receive the amount financed net of out-of-pocket fees, and you make a stream of equal monthly payments (plus any recurring charges such as PMI). The APR is the internal rate of return (IRR) on those cash flows, annualized as (1 + r_month)¹² − 1. If inputs are incomplete or invalid, the calculator pauses and shows a gentle prompt instead of partial results.

See the math

Payment (amortizing): PMT = i · P / (1 − (1 + i)−n), where P is principal (plus any financed fees), i is effective monthly rate, and n is number of months.

APR (monthly IRR): solve CF₀ = Σt=1..n PMT/(1+i*)ᵗ, where CF₀ = amountFinanced − upfrontFees. Then APR = (1+i*)¹² − 1.

For the mortgage APR, we include points and loan fees upfront and add optional PMI to the monthly outflow.

APR Calculator — FAQ

APR vs. interest rate—what’s the difference?

Interest rate prices the loan’s finance charge on the outstanding balance. APR rolls in certain fees (and points) so you can compare total cost.

Do all fees count toward APR?

Regulations vary; generally lender finance charges do, while third-party charges (e.g., taxes, title) may not. This tool is educational and includes the fields you enter.

When do points pay off?

Points reduce the rate but require upfront cash. They pay off if you keep the loan long enough for monthly savings to exceed the cost.

Is a shorter loan always a lower APR?

Often, but not always—fees, rate changes, and insurance can swing results.

How does PMI affect APR?

PMI acts like an extra monthly fee. If present for many months, it can materially increase APR.

Will prepaying principal change APR?

APR is computed for the scheduled payments. Prepaying changes the realized cost; use the mortgage payoff tool to model that scenario.

Use cases & examples

Example 1 — General APR with fees

Borrow $20,000 at 8% nominal (monthly), 48 months, with $400 upfront and $0 financed fees. Payment ≈ $488.26. Solving the monthly IRR on the cash flow gives APR ≈ 8.87%.

Example 2 — Mortgage with points

$400,000 home, 20% down, 30 years at 6.25%, 1 point ($3,200) + $1,200 fees, no PMI. Monthly ≈ $1,970. APR rises slightly above the note rate because of the upfront costs.

Example 3 — PMI impact

$350,000 home, 10% down, 30 years at 6.5%, $2,000 fees, 0.6% PMI/year. The PMI behaves like a monthly surcharge and can add ~0.2–0.4 percentage points to APR depending on duration.

APR explained: compare loans the way lenders do

The APR calculator helps you judge the true cost of borrowing by folding relevant fees into one comparable rate. Advertised interest rates are useful for estimating payments, but they can conceal meaningful differences in lender fees, points, and required insurance that change your total outlay. APR converts those moving parts into a single annualized percentage, so two loans with different structures can be compared fairly. It’s especially helpful when the fees are front-loaded (points) or when a slightly lower note rate tempts you to ignore breakeven timing.

In plain terms, APR answers the question: “Given what I actually receive today and what I must pay back over time, what rate would make those cash flows break even?” Because it’s an IRR, APR naturally accounts for payment timing and compounding. That means the same rate can imply different dollar costs if the term changes—paying interest for 15 years is fundamentally different from 30. When you see a low APR, you’re generally looking at either lower fees, a lower note rate, or a shorter horizon in which fees are amortized.

Best uses: compare mortgage offers with different points, evaluate personal loans that bundle origination fees, or weigh the impact of PMI while your down payment is below conventional thresholds. Limitations: APR does not predict your future behavior (refinances, early payoff), and not every third-party cost is always included. For bigger decisions, run a few scenarios and note the breakeven—how long until the cheaper monthly payment repays the upfront cost.

Educational estimates only. APR treatment of fees can vary by jurisdiction and loan type. Confirm disclosures with your lender.