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APR. The yearly cost of a mortgage, including interest, mortgage insurance, and the origination fee (points), expressed as a percentage. The annual percentage rate can be looked at in two primary ways: the nominal rate, which is a non-adjusted simple interest rate, or the effective rate, which takes compound interest into account. While the nominal rate is relatively straightforward, there can be many different ways of calculating the effective rate, depending upon how fees are factored into the equation.

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