Annual Percentage Rate


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.

For more information, see: Difference Between Interest Rate and APR.

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You should always try and get the lowest annual percentage rate you can any time you are taking on a loan.

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My boss was concerned about the high costs of corporate credit cards, so he negotiated with our bank to give us a lower annual percentage rate on our charges.

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The Smiths went to Acme Bank for their home loan because that bank offered the best annual percentage rate, with the accumulated cost being nearly 2 percent lower than that of any competitor.

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