Mortgage rate vs. APR: what is the difference?
Why the lowest advertised rate is not always the lowest-cost mortgage.
Interest rate
The note rate determines how interest accrues and is used to calculate principal-and-interest payments. It does not by itself show every charge associated with the loan.
Annual percentage rate
APR is a standardized estimate intended to reflect the interest rate plus certain finance charges over the assumed life of the loan. It can help compare similar structures, but it is not your payment.
Points and lender credits
Discount points increase upfront cost to reduce rate. Lender credits may reduce upfront cost in exchange for a higher rate. The best choice depends heavily on how long you expect to keep the loan.
Compare the same assumptions
When comparing quotes, align loan amount, property, occupancy, credit, lock period, points, lender credits and third-party fees. Otherwise, the apparent difference may not be a true apples-to-apples comparison.