APR Calculator

Find the annual percentage rate of a loan once fees are counted, and compare it with the interest rate.

Formula explained below

Fees paid at closing that count as finance charges, such as points or origination

The note rate on the loan

APR

6.1895%

Monthly payment
$1,199.10
Amount financed
$196,000.00
Finance charge over the loan
$235,676
Total of payments
$431,676

With fees counted, the 6% rate costs 6.189% a year.

Calculation breakdown

StepFormulaResult
Monthly payment$200,000.00 at 6% over 360 months$1,199.10
Amount financed$200,000.00 − $4,000.00$196,000.00
APRThe monthly rate i where $196,000.00 = $1,199.10 × (1 − (1 + i)^−360) ÷ i, times 126.1895%

How it works

Enter the loan amount, the upfront fees, the interest rate and the term.

Payment = Loan × i ÷ (1 − (1 + i)^−n), i = rate ÷ 12Amount financed = Loan − Fees = Payment × (1 − (1 + r)^−n) ÷ rAPR = 12 × r, solved for r

Worked example

A $200,000 loan at 6% for 30 years with $4,000 of fees:

  1. Payment: $1,199.10 a month
  2. Amount financed: 200,000 − 4,000 = $196,000
  3. The monthly rate that makes the payments worth $196,000 is 0.5158%, so the APR is 6.19%

Sources

Frequently asked questions

What is APR?

The annual percentage rate is the yearly cost of a loan expressed as a percentage, with certain upfront fees counted along with the interest. It lets you compare loans that have different fees.

How is APR different from the interest rate?

The interest rate is just the charge on the balance. The APR also includes finance charges you pay at closing, so it is higher than the rate when there are fees. A 6% loan with $4,000 of fees on $200,000 has an APR of about 6.19%.

How is APR calculated?

Under the Regulation Z actuarial method, the APR is 12 times the monthly rate that makes the present value of all the payments equal the amount you actually receive, which is the loan minus the fees. The calculator solves for that rate.

Which fees should I include?

Include prepaid finance charges such as origination fees and discount points that you pay at closing. Fees that are not finance charges, like some appraisal or title charges, are not part of the APR.

Does a lower APR always mean a cheaper loan?

Not always. APR assumes you keep the loan for the whole term. If you pay it off early, the fees spread over fewer months and cost more per year.

LoanRepayment schedule & total interestMortgageMonthly payment & amortizationRefinanceMonthly saving and break-even of a refinanceCar PaymentMonthly car payment with tax, down payment and trade-in

An estimate for regular monthly payments only. Lender disclosures follow the full rules of Regulation Z and may differ, for example for irregular first periods or variable rates.