The difference between APR and interest rate is that the APR (annual percentage rate) is the total cost of the loan including interest rate and all fees. The interest rate is just the amount of interest the lender will charge you for the loan, not including any of the administrative costs. The APR is a more accurate picture of how much the loan will cost you. I have for years advised borrowers to shop a mortgage around and ask for the APR which can help the borrower make an evaluation. The APR will always be higher than the interest rate . It works like this , if you get an interest rate of say 3.5% from two lenders and one has an APR higher than the other lenders APR this means there are more closing costs being added to the loan with the higher APR. In other words what is it costing the borrower to get that rate.. A lender with a lower rate is not always the best deal for a borrower if its costing thousands of dollars to buy it down it will show up in the APR. The farther away the APR is from the actual interest rate the more is costing to get that rate. Online and out of state lenders are notorious for offering low rates but never want to disclose the APR and hope the borrower never looks.

Asking for the APR is a great tool for consumers to shop their mortgage around. So shop that mortgage around , ask for the APR and as always shop local!