How does the mortgage rate differ from APR?  Q: Why is there a
difference between the mortgage rate and the APR, and which
should I be looking at when I compare mortgages?  A: APR stands
for Annual Percentage Rate, and measures the total annual cost
of the loan as a percentage of the amount borrowed. The mortgage
rate is by far the biggest component of that cost, but it isn't
the only component. Up-front costs such as points and fees are
also factored into the APR, which spreads those costs out over
the life of the loan and adds them to the mortgage rate.  This
helps with the fact that mortgage quotes often seem like
comparing apples and oranges. For example, you might get one
mortgage quote with a lower interest rate but higher up-front
fees. How do you compare this to a quote that will cost you less
up front but charge you more interest over the life of the loan?
The APR gives you a basis for that comparison by combining both
the interest rate and the up-front charges.  The only
complication stems from the