By ToolzHive
About this tool
Mortgage offers can be hard to compare: one lender quotes a low rate with discount points, another a higher rate with no points. The mortgage APR calculator includes the points and lender fees you pay upfront and shows the loan's true annual percentage rate, so you can see which offer really costs less.
How to use Mortgage APR Calculator
- Enter the loan amount, interest rate and term.
- Add discount points (1 point is 1% of the loan) and lender fees such as origination and underwriting.
- Compare the APR, monthly payment and upfront cost across different offers.
Worked example
A $320,000 30-year mortgage at 6.5% with 1 point ($3,200) and $3,000 in lender fees has an APR of about 6.69%, even though the note rate is 6.5%.
What are discount points?
Points are upfront fees you pay to lower your interest rate. Each point costs 1% of the loan amount and typically lowers the rate by around 0.25%, depending on the lender.
Which fees are included in mortgage APR?
Prepaid finance charges such as points, origination and underwriting fees. Third-party costs like title insurance, appraisal and recording fees are usually not included.
Are points worth paying?
They pay off if you keep the loan long enough. Divide the cost of the points by the monthly savings to find your break-even point in months.
Put this guide into practice
- Mortgage APR Calculator — Calculate a mortgage APR including discount points and lender fees.