Want to estimate the true cost of your mortgage and monthly payments over time? Use our calculator to see the annual percentage rate (APR) you’ll pay on your mortgage. You can estimate how much you’ll pay each month, every year and over the life of your mortgage.
Mortgage APR Calculator
Use this mortgage APR calculator to help you compare rates with lenders to get the best quote.
Disclaimer: Forbes Advisor's calculator only provides an estimate. Your actual rate will depend on your lender and personal financial profile.
How To Use This APR Calculator
To find out what the APR amount will be on your mortgage, simply input the following items:
- Loan amount: The total amount of money you are borrowing to buy the home
- Interest rate: The interest rate the lender has offered you on the loan
- Loan term: The total number of years for the mortgage
- Discount points: This is any points you purchased to lower the interest rate on your mortgage.
- Origination and other fees: This is where you can include additional costs like the percentage the lender charges for originating your mortgage or if there’s mortgage insurance costs included.
Once you have inputted all the loan terms and costs, the calculator will determine your APR estimate so you can see how much it will cost you to borrow funds on an annualized basis.
What Is an APR On a Mortgage?
The APR is the cost of borrowing money from the bank as an annualized percentage. Your APR can include how much interest you’ll pay, points to lower your interest rate, mortgage insurance, loan origination fees and closing costs. It can also help you understand how much you’ll pay for your mortgage if you keep it for the entire term.
When shopping around for mortgages, it’s good to look at the APR, not just the interest rate—the APR is designed to show homebuyers their complete cost of borrowing. The Truth In Lending Act (TILA) requires that buyers get a clear disclosure of what’s entailed in the APR of their loan.
How Do You Calculate Your APR?
Follow these steps to calculate your APR:
- Add the lender fees to the total interest you would pay over the life of the loan.
- Divide the total by the principal amount of the mortgage.
- Divide the new total by the number of days in the loan term. So if you’re trying to figure out the APR on a 30-year mortgage, you would divide the total by 10,950.
- Take that number and multiply it by 365 to get your annual rate.
- Multiply your new number by 100 to convert it to a percentage that is your APR.
How Does APR Work?
The APR works by showing borrowers their total borrowing costs with fees, paid points and interest rate combined.
What Is a Good APR for a Mortgage?
The average fees on a 30-year fixed-rate mortgage have fluctuated between 0.6% and 0.9% in the past year, according to Freddie Mac. Since fees fluctuate from lender to lender and also over time, shop around to get the best APR.
Interest Rate vs. APR Mortgage
The terms APR and interest rate are sometimes used interchangeably, but they’re not the same.
The interest rate you pay on your mortgage is how much you pay every year to borrow money, represented as a percentage. It doesn’t include any other fees or charges that are part of your mortgage.
Your mortgage APR is the total cost of borrowing the money, represented as a yearly percentage rate. It includes your interest rate plus other charges, such as loan origination fees, private mortgage insurance and points.
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Frequently Asked Questions (FAQs)
What is a Normal APR for a Mortgage?
The current average rate for a mortgage can change daily, but it’s a good way for you to compare mortgages and better understand the rate that you’re offered. Right now, mortgage rates are considered historically low.
The APR you’ll get on a mortgage won’t necessarily be the average; it will be based on several factors, including:
- Current interest rates—these vary depending on things like inflation and the Federal Reserve’s monetary policy.
- The term of your mortgage (e.g. 30-year fixed, 15-year fixed, 5/1 ARM)
- Whether it’s jumbo mortgage (a loan that’s $548,250 or higher) or not
Your personal financial information, including your credit scores, income history and debt-to-income (DTI) ratio
What is a Good APR on a 30-year Mortgage?
A good APR on a 30-year, fixed-rate mortgage is typically reserved for borrowers with very good or excellent credit. Right now, a good APR for that borrower is hovering above 3%; however, this number can fluctuate often.
Remember: To qualify for the best rate, you need to have excellent personal financial information, including excellent credit, a good job history and a low debt-to-income ratio.
What is Mortgage Amortization?
Amortization means paying off a loan with regular payments over time. Mortgage amortization refers to the specific way a mortgage is paid down. For a fixed-rate mortgage, the monthly payment will be the same for the life of the loan (excluding taxes and insurance), but the composition of the payment will change.
At first, your monthly payment will mostly be applied to interest, and a smaller amount to the principal (the amount you borrowed and have to repay). Over time, this balance will shift so that more of your payment is applied to the principal and less to interest.
An amortization schedule shows you a breakdown of what goes into your monthly mortgage payment.
How much interest is paid on a 30-year mortgage?
The amount of interest paid on a 30-year mortgage depends on the interest rate and whether the borrower makes additional payments toward the principal to pay down the balance. As the principal amount decreases, the less interest you’ll pay.
Why is a 30-year mortgage popular?
A 30-year mortgage is popular because it allows borrowers to break up a large purchase price into small, presumably affordable payments over three decades. That said, there’s no mortgage type that’s superior to others, only mortgages that are better suited to meet the needs of certain borrower requirements.
For some, the fact that a 30-year mortgage has lower payments than mortgages with shorter terms (because they’re spread out over a longer period) is a plus whereas others would rather make bigger monthly payments and pay less interest over time.
Is APR better when it’s lower or higher?
The lower the APR, the less money you’ll pay on your mortgage. If you shop around for mortgage rates, it’s usually a good idea to go with the lender that offers the lowest APR. However, some borrowers may charge upfront fees in exchange for a lower APR, which might not be ideal for some borrowers.
Does APR include PMI?
Private mortgage insurance, or PMI, may be included in your APR. But it’s important to ask your lender which fees are included in the APR so that you have an accurate picture of total costs.
