Use the note rate in the payment calculator
If you type the APR into the payment calculator, the principal-and-interest payment will not match the loan estimate. Use the interest rate line for the payment and read APR beside it.
A loan with points can show a lower note rate and a higher APR than a no-point loan, because the points are part of the APR calculation.
APR is a comparison tool with limits
APR assumes you keep the loan for the full term and does not know if you will refinance. Two loans with the same APR can still feel different month to month.
Taxes and homeowners insurance are generally outside APR. A low APR does not mean a low housing payment.
| Number | Use it for |
|---|---|
| Note rate | The monthly principal and interest |
| APR | Comparing finance charges |
| Tax and insurance | The housing payment, not APR |
Calculators
Related guides
Sources
Common questions
Why is APR higher than my rate?
Because it includes certain upfront charges, such as points or origination, spread over the term.
Which one tells me the payment?
The note rate, together with the loan amount and the term.