Free apr with fees calculator
Calculate the true annual percentage rate on a loan — enter nominal rate, fees, and term to see the APR that Reg Z requires lenders to disclose, updated live, as you type.
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APR calculation uses disclosed fees. Third-party closing costs not paid to the lender may not be included. Verify with your Loan Estimate (LE).
Results are estimates. Consult a professional.
How the APR calculator works
Annual Percentage Rate (APR) captures the true cost of borrowing by folding both the interest rate and the upfront fees into a single annualised figure. Because fees reduce the amount you effectively receive while your scheduled payments stay the same, the APR is always at or above the nominal (stated) interest rate whenever any fees are charged.
The APR is found by solving for the rate r that makes the present value of all scheduled payments equal the net amount you actually receive — that is, the loan principal minus any points, origination fees, or mortgage-broker fees paid at closing. This is the approach required by Regulation Z of the Truth in Lending Act.
Worked example: $200k mortgage with points and fees
Jamie takes a $200,000 mortgage at a stated rate of 6.75% for 30 years. The lender charges 1 point ($2,000) plus a $500 origination fee at closing. Both fees are prepaid finance charges under Reg Z, so they reduce the amount Jamie effectively receives.
APR vs nominal rate: how points and fees move the needle
The table below shows the APR at 7% nominal for three loan sizes and varying combinations of points (as a percent of the loan) plus a flat $500 origination fee on a 30-year term. All figures are illustrative estimates.
| Loan size | 0 pts + $0 fees | 0.5 pt + $500 | 1 pt + $500 | 2 pts + $500 |
|---|---|---|---|---|
| $200,000 | 7.00% | 7.10% | 7.19% | 7.37% |
| $300,000 | 7.00% | 7.07% | 7.14% | 7.28% |
| $400,000 | 7.00% | 7.05% | 7.10% | 7.20% |
Source: CFPB Regulation Z, Truth in Lending Act. Estimates based on 30-year fixed, monthly compounding. Actual APR depends on all Reg Z finance charges included by your lender.
Tips for using APR when comparing mortgages
APR is the most powerful single number for comparing loan offers — but only when used correctly. A few common errors can send you to the more expensive loan.
- Compare APR, not rate — Two loans with the same interest rate can have very different APRs if one has higher origination or broker fees. The APR is the legally standardised comparison figure.
- Match loan terms — APR comparisons are only valid across the same term length. A 15-year and a 30-year loan at the same rate will show different APRs because the fees are amortised over different periods.
- Ask for the Loan Estimate — Lenders must provide a 3-page CFPB Loan Estimate within three business days of your application. Page 1 shows the APR and the total interest paid over the life of the loan.
- Watch for excluded fees — Some charges (title insurance, appraisal, prepaid homeowners insurance) may or may not be included in APR depending on how the lender categorises them. Get an itemised fee list and compare line by line.
- Shorter stays favour lower-rate, higher-fee loans less — Points lower your rate but raise the APR slightly. If you sell or refinance before the break-even point (typically 4–7 years), paying points costs more than it saves.
Accuracy and limitations
This calculator solves for APR using iterative numerical methods consistent with Regulation Z methodology. Results are accurate to within a fraction of a basis point for standard fixed-rate amortising loans. It does not model adjustable-rate mortgages, interest-only periods, balloon payments, or variable fee structures — all of which require a different APR calculation under Appendix J of Regulation Z.
Not financial advice — consult a financial professional for your specific situation.
APR and mortgage cost terms defined
About this APR calculator
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