Definition
APR is the annual percentage rate, a broader cost measure that combines the interest rate with certain loan costs so borrowers can compare offers more clearly.
If you are comparing mortgage options, treat apr as one piece of the total cost and risk picture, not a standalone detail.
Why It Matters
APR matters because two loans with the same interest rate can have different total costs when fees are included.
Simple Example
A 6.50% interest rate with higher fees may produce a higher APR than a 6.625% rate with lower fees.
How to Use This Term
When you see apr on a loan estimate, calculator result, or lender conversation, connect it to three practical questions: how it affects monthly payment, how it affects cash needed now, and how it affects flexibility later.