Definition
The cost of credit expressed as a yearly rate, including interest plus most lender fees and points, designed to allow comparison between loans.
Example
Two loans both quoted at 6.25% had APRs of 6.31% and 6.62% because one carried far higher fees.
Related terms
- Acceleration Clause
- Accrued Interest
- Adjustable Rate Cap
- Adjustable-Rate Mortgage
- Amortization
- Assumable Mortgage
Frequently asked questions
What does Annual Percentage Rate mean in real estate?
The cost of credit expressed as a yearly rate, including interest plus most lender fees and points, designed to allow comparison between loans.
How is Annual Percentage Rate used in practice?
Two loans both quoted at 6.25% had APRs of 6.31% and 6.62% because one carried far higher fees.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.