Disclaimer: NerdWallet strives to keep its information accurate and up to date. In order to determine your mortgage loan's APR, these fees are added to the original loan amount to create a new loan amount of $205,000. APR is a loan-comparison tool that measures all the costs of a mortgage, including the interest paid over the life of the loan, origination fees and points. Input your loan amount, interest rate, loan term, and financing fees to find the APR for the loan. On a 30-year mortgage with a 5-percent fixed interest rate, the monthly payments for a $300,000 house with a 20 percent down payment would be $1,288 plus taxes and insurance. The cost of one discount point equals 1% of the loan amount. When comparing loan offers with the same terms and similar fees, the mortgage with the lowest interest rate is usually the best deal. Step 4 Subtract one from the number calculated in Step 3 to determine APR. The result is the annual percentage rate. APR, or annual percentage rate, is a calculation that includes both a loan’s interest rate and a loan’s finance charges, expressed as an annual cost over the life of the loan. Loan term: The number of years it would take to pay off the loan with equal monthly payments. Input loan amount, interest rate, number of payments and financing fees to find the APR for the loan. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. The APR reflects costs paid directly to the lender, which include the interest rate and loan-related fees, such as origination charges and discount points. It is designed to help borrowers compare different loan options. At the loan's interest rate, figure what the monthly payment would be if you include fees in the loan amount rather than pay them upfront. The APR on an adjustable-rate mortgage (ARM) is a forecast only, which is often inaccurate. For a 30-year loan, the entire term is 30 years. When you convert that "would-be" payment into a monthly and then annual rate, it comes out to 4.25%. Your APR often depends on interest rates in the broader economy. Mortgage insurance and mortgage broker fees are included in the APR calculation. Enter how much you wish to borrow in the "Mortgage Amount" box. Raise the number calculated in Step 2 to the power of the number of times the money compounds per year. For example, if your mortgage is $100,000, but there are $2,000 in out-of-pocket loan costs, you’re really only borrowing $98,000 from the bank. See how those payments break down over your loan term with our amortization calculator. If you're using a credit card or taking out a mortgage on a home, you may need to use more money than you currently have. This finance charge is called APR. 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