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uppercut7141

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interest rate vs. APR

I wanted to know what the difference is between interest rate vs. APR?  More within a mortgage environment.
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d-glitch
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The APR refers to the Annual Percentage Rate.

Interest rate is more generic.

If your interest rate is 1% per month, your APR will be more than 12% per year because of compounding.

If you pay points on a mortgage to get a lower interest rate, your APR will be higher because the points cost and other fees will be amortized over the life of the loan.

APR tries to give you a standard way to compare the costs of borrowing for different types of loans with all sorts of gimmicks.

   http://en.wikipedia.org/wiki/Annual_percentage_rate

Note that there will be a legal definition for the effective APR in your jurisdiction.
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TommySzalapski
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