APR Calculator

How to use this APR calculator

1. Choose “Loan APR” and enter the loan amount, the term and the note rate, which is the interest rate on the loan before fees. The default rate is the 7.03% average 30-year fixed rate from Freddie Mac’s weekly survey (Week ending Sep 24, 2026), rounded to the nearest eighth of a point; the loan amount and fees are examples.
2. Add the upfront finance charges from your offer: points as a percent of the loan (one point is 1%), the origination fee, and other charges that count as finance charges. Then say whether they are paid at closing or added to the loan.
3. Read the APR and the four disclosure figures: amount financed, finance charge, APR and total of payments. The table under the results shows how the APR changes as charges rise.
4. Choose “Compare two offers” to see each APR and total cost, plus the month when paying points pays off. Choose “APR from payment” if you know the amount you receive and the payment instead of the rate.

What is APR, and how is it different from the interest rate?

The interest rate is the price of borrowing the balance. The APR (annual percentage rate) is the cost of the credit as a yearly rate once upfront finance charges are counted. The CFPB describes the APR as the interest rate plus additional fees the lender charges, including origination charges, and advises comparing APRs to APRs, not APRs to interest rates.

Among the disclosures Regulation Z requires for a closed-end loan are four headline figures. The amount financed is, in the simplest case, the loan amount minus prepaid finance charges. The finance charge is the dollar cost of the credit. The total of payments is what you will have paid after all scheduled payments, and the APR expresses the cost as a yearly rate (§ 1026.18). They fit together: total of payments = amount financed + finance charge. On the example loan that is $297,000 + $421,528 = $718,528.

Because a fee reduces the amount financed but not the payment, the same payments repay less money, so the rate that fits them is higher. The example’s $3,000 in charges are 1% of the loan, which moves the APR from 7.000% to 7.100%. If the same charges were added to the loan instead of paid at closing, the payment would be $2,015.87 and the APR 7.099%.

APR formula and worked example

Regulation Z defines the APR as a measure “that relates the amount and timing of value received by the consumer to the amount and timing of payments made” (§ 1026.22(a)(1)), computed by the actuarial method in Appendix J. For a loan with equal monthly payments that start one month after closing, the APR is 12 times the monthly rate i at which the payments are worth exactly the amount financed:

There is no way to isolate i, so it is found by iteration: guess a rate, check whether the payments are worth more or less than A, and adjust. Appendix J describes the same procedure, and a spreadsheet’s RATE function does it too.

Worked example

Take $300,000 at 7.000% for 360 months with $3,000 in charges paid at closing. The payment is M = $1,995.91 and the amount financed is A = $297,000. At the note rate’s monthly rate of 0.5833%, 360 payments of $1,995.91 are worth $300,000 today, more than A, so the rate that fits must be higher. At i = 0.5917% they are worth $297,000, which matches. That gives APR = 12 × 0.5917% = 7.100%. In a spreadsheet, =RATE(360, -1995.91, 297000)*12 returns the same figure.

As a check against the regulation, Appendix J(c)(1) works an example of $5,000 repaid with 24 monthly payments of $230 and states an APR of 9.69%. This calculator’s “APR from payment” mode gives 9.686%, which rounds to 9.69%. Another worked example in Appendix J(b)(9), $1,000 repaid with 36 payments of $33.61, gives 12.83%; here it is 12.83%.

APR by note rate and upfront charges: 30-year vs 5-year loans

Charges are paid once, but the APR spreads them over the term. The shorter the loan, the fewer months there are to spread them over, so the same charges raise the APR far more. At a 7% note rate, charges of 2% of the loan add 0.2 percentage points to a 30-year loan’s APR and 0.85 percentage points to a 5-year loan’s. These tables show the APR for charges paid at closing, as a percent of the loan amount.

The same effect by term, for a 7.000% note rate and upfront charges of 2% of the loan: the APR is 7.201% on 30 years but 7.851% on 5 years.

Which fees are included in the APR?

Regulation Z defines the finance charge as “any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit,” and it does not include charges of a type payable in a comparable cash transaction (§ 1026.4). Only finance charges affect the APR. The rule lists what is and is not one.

Counted as finance charges

• Interest, and any amount payable under an add-on or discount system.
• Points, loan fees, assumption fees, finder’s fees and similar charges.
• Service, transaction, activity and carrying charges.
• Fees charged by a mortgage broker, even if the lender does not require a broker.
• Premiums for insurance that protects the creditor against your default, and premiums for credit life, accident, health or loss-of-income insurance and debt cancellation or suspension coverage, unless the voluntary-coverage conditions in § 1026.4(d) are met.
• Appraisal, investigation and credit report fees, except the real-estate fees listed below.

Not counted as finance charges

• Application fees charged to all applicants, whether or not credit is extended.
• Charges for actual, unanticipated late payments, exceeding a credit limit, or default.
• Fees for participating in a credit plan, such as an annual fee.
• Seller’s points.
• On a transaction secured by real property or a residential mortgage, if bona fide and reasonable: title examination and title insurance fees, document-preparation fees, notary and credit-report fees, appraisal and pre-closing inspection fees, and amounts paid into escrow.

The calculator takes the total you enter, so ask your lender which charges it treats as finance charges and enter only those. Title fees and escrow deposits on a mortgage are usually part of your closing costs without being finance charges.

Mortgage APR on the Loan Estimate

On a Loan Estimate, the CFPB says you can find the interest rate on page 1 under “Loan Terms” and the APR on page 3 under “Comparisons,” where it describes the APR as reflecting the interest rate, any points, mortgage broker fees and other charges you pay to get the loan. Regulation Z’s wording next to that figure is “Your costs over the loan term expressed as a rate. This is not your interest rate” (§ 1026.37(l)). The Closing Disclosure repeats the APR in its “Loan Calculations” table along with the total of payments, the finance charge and the amount financed (§ 1026.38(o)).

For an adjustable-rate mortgage, the CFPB notes that the APR does not reflect the maximum interest rate of the loan, so be careful comparing APRs across fixed-rate and adjustable-rate loans. A rate on its own also says little about fees: Freddie Mac’s weekly average of 7.03% (Week ending Sep 24, 2026) is a rate, and <a href="https://www.freddiemac.com/pmms">Freddie Mac says</a> it cannot report average fees and points, so it cannot tell you the APR of your offer. To price the whole payment, including taxes and insurance, use the mortgage calculator.

Points vs. no points: when does paying points pay off?

One discount point costs 1% of the loan amount, and how much a point lowers your rate depends on the lender, the loan and the market, according to the CFPB’s guide to discount points and lender credits. The CFPB suggests asking for the total costs with and without points over a few time frames: the shortest, the longest and the most likely time you will keep the loan.

Here is an example with illustrative offers on the same $300,000, 30-year loan. Offer A is 7.000% with no points; Offer B is 6.750% with 1 point ($3,000). Both have the same $3,000 of other charges. Offer B has the lower APR (6.948% vs. 7.100%) and a payment that is $50.12 lower, but costs $3,000 more up front.

Offer B breaks even in month 48 (4 years): from then on, the lower rate has saved more in interest than the extra points cost. The common shortcut divides the extra cost by the payment saving: $3,000 ÷ $50.12 = 60 months. It runs longer here because the lower-rate loan also pays down more principal each month, so the interest saved in the first month ($62.50) is larger than the payment saved ($50.12). If you sell or refinance before the break-even, the points were not worth it.

The break-even counts dollars only. It does not account for what else you could do with the money you would spend on points, such as a larger down payment or an emergency fund. If you might refinance, try the refinance calculator.

Credit card APR and the daily periodic rate

A credit card APR works differently from an installment loan APR. The CFPB says credit card interest rates are usually stated as a yearly rate called the APR, and that some card issuers calculate interest with a daily periodic rate, which generally can be found by dividing the APR by either 360 or 365, depending on the issuer. That rate is multiplied by the amount owed at the end of each day and the result is added to the balance, so interest compounds daily (CFPB). Regulation Z computes a card’s APR by multiplying each periodic rate by the number of periods in a year (§ 1026.14(b)), and an annual fee is not a finance charge because fees for participating in a credit plan are excluded (§ 1026.4(c)(4)).

For example, a 24% APR divided by 365 is 0.0658% a day. If you carried a balance for a year with no payments or new purchases, daily compounding would turn that into about 27.11%. To see what a card balance costs you, use the credit card payoff calculator.

APR vs. APY

Both are yearly rates, but they measure different things. An APR is a borrowing rate: Appendix J defines it as the nominal rate, the rate per period times the number of periods in a year, so it does not include compounding. An APY is a deposit rate that reflects compounding over a 365-day period (Regulation DD, § 1030.2). The APR on the example loan, 7.100%, is equivalent to an effective annual rate of 7.336% when interest compounds monthly. To convert a savings rate, use the APY calculator.

How to compare loan offers

1. Line up the same loan. Compare the same amount, term and type (fixed or adjustable) so the APRs are comparable.
2. Compare APR to APR, then look at the finance charge and the monthly payment. A lower rate with high fees can cost more than a slightly higher rate with none.
3. Match the loan to how long you will keep it. APR assumes the full term. If you may sell or refinance sooner, use the cost-over-time table in “Compare two offers.”
4. Ask what is in the payment. Start from the rate with the interest rate calculator if you only know the payment, or price a car loan with the auto loan calculator and any loan with the loan calculator.

This page starts from the rate and fees and works out the APR. The interest rate calculator goes the other way: it finds the rate from a loan amount, payment and term.

What this calculator does not model

• It assumes a fixed rate, equal monthly payments and a first payment one month after closing. Odd first periods, irregular payments and adjustable rates follow other rules in Appendix J.
• Payments are rounded to the cent; real lenders adjust the last payment by a few cents.
• Monthly mortgage insurance, taxes, insurance and escrow are not modeled. Enter only the charges your lender counts as finance charges.
• Lender credits (negative points) and prepayment penalties are not modeled.
• The result is an estimate. The APR in your loan documents is the legal figure and can differ within the tolerance Regulation Z allows, which is 1/8 of 1 percentage point for a regular loan (§ 1026.22(a)(2)).