APR Calculator
APR calculator for a fixed-rate loan: enter the amount, interest rate, term and fees to get the APR with fees, the monthly payment and the total cost. How it works
Use the APR Calculator
About the APR Calculator
$5,000 of fees on a $200,000 loan at 6.5% for 30 years makes the APR 6.745%, about a quarter point above the note rate. The APR calculator finds the yearly rate at which your monthly payments repay the money you actually received, the loan minus the fees, so a loan with no fees has an APR equal to its interest rate.
APR on a $300,000 30-year loan by fees paid at closing
| Fees (share of the loan) | 6% note rate | 6.5% note rate | 7% note rate |
|---|---|---|---|
| $0 (0%) | 6.000% | 6.500% | 7.000% |
| $1,500 (0.5%) | 6.047% | 6.548% | 7.050% |
| $3,000 (1%) | 6.094% | 6.597% | 7.100% |
| $6,000 (2%) | 6.189% | 6.695% | 7.201% |
| $9,000 (3%) | 6.287% | 6.795% | 7.305% |
| $12,000 (4%) | 6.385% | 6.897% | 7.409% |
Fixed rate, monthly payments, fees paid in cash at closing, and every fee counted as a finance charge. With no fees the APR is the note rate.
The same $6,000 of fees over different terms
| Term | Monthly payment | APR, fees paid in cash | APR, fees added to the loan |
|---|---|---|---|
| 10 years | $3,406.44 | 6.953% | 6.944% |
| 15 years | $2,613.32 | 6.822% | 6.815% |
| 20 years | $2,236.72 | 6.757% | 6.752% |
| 30 years | $1,896.20 | 6.695% | 6.691% |
A $300,000 loan at 6.5%. The payment shown is for fees paid in cash, so the loan stays $300,000. A shorter loan spreads the same fees over fewer years, so its APR sits further above the note rate.
Frequently asked questions
- What is the difference between APR and interest rate?
- The interest rate sets the monthly payment. The APR folds the fees into a yearly rate: the Consumer Financial Protection Bureau describes it as reflecting the interest rate, any points, mortgage broker fees and other charges you pay to get the loan, which is why it is usually the higher number. On $200,000 at 6.5% for 30 years with $5,000 of fees, the rate is 6.5% and the APR 6.745%.
- How do you calculate APR on a loan?
- Work out the monthly payment from the note rate. Then find the monthly rate at which those payments have a present value equal to the amount you received after fees, and multiply it by 12. There is no closed formula, so the rate is found by trial: 360 payments of $1,264.14 against $195,000.00 received is 6.745% a year.
- Does it matter if the fees are paid in cash or added to the loan?
- A little. Paid in cash, $5,000 of fees on $200,000 at 6.5% for 30 years gives a payment of $1,264.14 and an APR of 6.745%. Added to the loan, you borrow $205,000.00, the payment is $1,295.74 and the APR is 6.739%.
- Why is this APR different from the one on my Loan Estimate?
- A lender counts only the charges Regulation Z defines as finance charges. Points and loan fees count. On a loan secured by real property, title, survey, notary, credit-report and pre-closing appraisal fees do not, if they are bona fide and reasonable in amount. Required mortgage insurance does count, and so does interest paid at closing for the days before the first payment period; this tool models neither, which is often why a mortgage APR here comes out lower. It counts every fee you type, so enter only the fees that count. Regulation Z also treats a disclosed APR on a regular loan as accurate within 1/8 of a percentage point.
- Is the APR higher on a shorter loan?
- For the same fees, yes. $6,000 of fees on $300,000 at 6.5% gives 6.695% over 30 years, 6.822% over 15 and 6.953% over 10, because the cost is spread over fewer years. The APR assumes you keep the loan to the end. Pay it off or refinance sooner and the fees are spread over fewer years still.
- What is the APR on a personal loan with an origination fee?
- Enter the fee in dollars, or switch the field to a percentage of the loan. A $25,000 loan at 8% for 5 years with a $500 fee taken out of the proceeds has a payment of $506.91 and an APR of 8.859%.
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