APR (Annual Percentage Rate)
The total cost of a loan including the interest rate, origination fees, discount points, and other lender charges — expressed as a single annual percentage. APR is always higher than the stated interest rate. It’s the most accurate single-number cost comparison across loans, especially valuable when comparing non-QM programs with different origination fee structures.
How does this affect your loan? Estimate self-employed qualifying income with the DTI calculator, or read the self-employed mortgage guide.
Related terms
- Rate lock — A lender commitment to hold a specific interest rate for a set period (typically 30–60 days) while your loan i…
- Points / discount points — Upfront fees paid to the lender to buy down the interest rate. 1 point = 1% of the loan amount. On a $400,000…
- Origination fee — The lender’s fee for processing and underwriting the loan. Typically 0.5–1% on conventional loans; 1–2% on non…
- MIP (Mortgage Insurance Premium) — FHA’s mortgage insurance charge. Consists of an upfront MIP (1.75% of the loan, typically financed into the ba…
- PMI (Private Mortgage Insurance) — Required on conventional loans with less than 20% down. Protects the lender — not the borrower. Typically 0.5–…
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Sources
Educational definition only — not financial, legal, or tax advice. Programs and limits change; verify current terms with a licensed professional.