To begin with, we should understand the meaning of APR. These three letters stand for annual percentage rate. With the help of APR calculator we can measure the overall cost of a loan. There are many “extra” expenses (closing costs, charges, such as mortgage insurance, points, etc.) that influence the interest rate over a certain period of time. And APR is extremely helpful because it shows how all the expenses mentioned above influence the amount of money you will have to pay.

It looks complicated, but in reality this calculator is one of the simplest. There is a lot of information that is necessary to input to get the result. Let us start from the beginning. The first digits would be the amount of loan. After that come interest rate (a quoted one) and the period of repayment. Then it is necessary to put the percentage of the loan that is made as one-time payment at the very beginning. And, finally, closing costs. All the figures can be calculated by means of closing cost, monthly payment, interest payment calculators.

The purpose of APR is to help you to compare various mortgage loans and to choose the best one for you. But you should keep in mind that the calculator works only if you are going to compare identical loans.