The mortgage interest rate is simply the cost you pay each year on the money you borrower to purchase or refinance your home, expressed as a percentage. The annual percentage rate, or APR, includes the mortgage interest rate and other charges. The other charges that increase the APR are, broker fees, points, mortgage insurance premiums and more.
The APR is always more than the mortgage interest rate.
When comparing loans, try comparing the APR to get an idea of which loan costs less. However, it’s good to compare more than just the APR when you are trying to determine what loan makes the most sense for your circumstances. Stay vigilant when you compare the APR of an adjustable rate mortgage (ARM) to that of a fixed rate mortgage. This is because the APR of an adjustable rate mortgage does not reflect the maximum interest rate of the loan.