Rates & interest
APR (Annual Percentage Rate)
The yearly cost of a mortgage as a percentage, folding in the interest rate plus certain lender fees and points. APR is usually higher than the note rate and is the best single figure for comparing offers.
What does APR mean?
Two loans can share the same note rate yet cost very differently once points and lender fees are counted — and that's what APR captures. By rolling those upfront costs into one yearly percentage, APR lets you compare Michigan lenders on a like-for-like basis.
Watch for a wide gap between rate and APR: it signals a fee-heavy loan. APR assumes you keep the loan to term, so if you expect to move or refinance early, weigh the upfront cost separately from the APR.
A Michigan example
Say two lenders both quote the same note rate on a $285,000 loan. One charges a full point plus a heavy origination fee; the other charges almost nothing upfront.
The note rate looks identical, but the fee-heavy loan carries a noticeably higher APR. That single number exposes which quote is actually cheaper once the closing costs are counted.
Related terms