First Time Home Buyer, Investment Property, Refinance

What Is the Difference Between Interest Rate and APR?

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Wondering what the difference is between an interest rate and APR? Never even heard of an APR and now are intrigued to learn more about this mystery acronym?

Interest Rate

An interest rate is the yearly cost of a loan to a you shown in a percentage. It can either be variable or fixed depending on your loan program. Interest rates are constantly fluctuating.  The rate you can qualify for will depend on your income and your credit score.


APR (annual percentage rate) is the yearly cost of a loan and fees to you shown in a percentage. The key word here is “fees”. Unlike the interest rate, the APR will include fees like loan origination fees, discount points, closing costs, and mortgage insurance. This rate will vary depending on lender, because every lender will have different fee costs.

Still not sure what everything means? Call, text, or email us here at The Ben Lemon Team and we would be thrilled to help you with actual numbers and rates.


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It’s important to know the differences in property types because it makes an impact on your loan type and type of home owner’s insurance you need. Let’s review them now.