What is annual percentage rate?
The Bankrate.com financial term of the day is: "annual percentage rate" or "APR."
When you want to borrow money, such as with a mortgage or a credit card, you want to know that you're getting the best deal on your loan and aren't getting soaked. The annual percentage rate, or APR, is a handy and standard way of expressing what a loan is going to cost you each year, so you can make comparisons. The APR is an interest rate that rolls in the fees and other expenses of acquiring the loan. For example, the annual percentage rate on a mortgage takes into account not only the loan interest but also mortgage insurance and certain closing costs. It's important to point out that APR applies to car loans but not leases. With an auto lease, the equivalent annual cost is called the "money factor."
The annual percentage rate, or APR, offers an apples-to-apples way of comparing loan to loan.
To find the best home loan, visit the mortgage rate tables at Bankrate.com.