Skip to content

    Under active development. New calculators and features ship every week. Everything currently runs free while the site matures — pricing pages are a preview, checkout is not open yet.

    Search ⌘K
    Calculates locally in your browser · note rate and closing costs
    Loans / APR

    APR calculator

    The note rate sets your payment; the APR tells you what the money actually cost once fees are included. This engine solves for the rate that discounts the payments back to the cash you received, so two offers with different fees can be compared on one number.

    Term30 yearsFees$6,000APR gap0.20 pp
    APR
    6.695%
    Note rate 6.500% plus $6,000 in costs
    Monthly payment
    $1,896
    360 payments of principal and interest
    Total interest
    $382,633
    Over 30 years
    Total cost of credit
    $388,633
    Interest plus fees
    What the fees do
    The same loan priced with and without the closing costs included.
    30-year term
    What the fees do
    MeasureNote rate onlyWith fees (APR)
    Rate6.500%6.695%
    Cash received$300,000$294,000
    Monthly payment$1,896$1,896
    Total paid$682,633$682,633
    Cost of credit$382,633$388,633

    APR is a comparison tool, not the rate that compounds on your balance. The note rate still sets the payment.

    Inspect the model
    Choose a quick result view, a scaled comparison, or the complete diagnostic set.
    Balance over the term
    Early payments are mostly interest, so the balance falls slowly at first.
    Balance over the term$0$67.2k$134.4k$201.6k$268.8k$336.0kY0Y0Y2Y2Y4Y4Y6Y6Y8Y8Y10Y10Y12Y12Y14Y14Y16Y16Y18Y18Y20Y20Y22Y22Y24Y24Y26Y26Y28Y28Y30Y30Balance
    APR as fees rise
    Closing costs are spread over the term, so their effect is largest on short loans.
    APR as fees rise0.0001.593.184.776.377.96$0.00$0.00$1,800$1,800$3,600$3,600$5,400$5,400$7,200$7,200$9,000$9,000$10,800$10,800$12,600$12,600$14,400$14,400$16,200$16,200$18,000$18,000APR %
    Canonical equations
    The exact relationships implemented by this engine.

    M = P·i / (1 − (1+i)⁻ⁿ) · Standard amortising payment at the note rate.

    P − fees = M·(1 − (1+a)⁻ⁿ)/a · Solve for a; double it for the annual figure.

    M·n − P + fees · Interest plus the fees you paid to get the money.

    finance methodology

    A clear path from inputs to results.

    The note rate sets your payment. The APR tells you what the money actually cost once fees are included, by solving for the rate that discounts the payments back to the cash you received. This calculator does that solve and shows the gap between the two rates.

    Step-by-step methodWorked exampleAssumptions explained

    How to use

    1. Enter the amount borrowed.
    2. Set the note rate and the term.
    3. Add the fees and closing costs paid to obtain the loan.
    4. Compare the APR with the note rate — the gap is the cost of the fees.

    The formula

    P−F=M⋅1−(1+a)−na,M=Pi1−(1+i)−nP - F = M \cdot \frac{1 - (1+a)^{-n}}{a}, \qquad M = \frac{P i}{1-(1+i)^{-n}}

    Reference: Regulation Z, 12 CFR §1026.22 (APR); standard amortising payment formula.

    Worked example

    $300,000 at 6.5% over 30 years with $6,000 of fees

    Inputs
    • Loan $300,000.
    • Note rate 6.5%.
    • Term 30 years.
    • Fees $6,000.
    Calculation path
    1. 1

      Monthly payment at the note rate: $1,896.20.

    2. 2

      Cash actually received: 300,000 − 6,000 = $294,000.

    3. 3

      Solve for the rate that discounts 360 payments of $1,896.20 to $294,000.

    4. 4

      That rate is 0.558% a month, or 6.695% a year.

    5. 5

      The APR is 0.195 percentage points above the note rate.

    6. 6

      Total cost of credit: $382,632 in interest plus $6,000 in fees.

    Result

    Payment $1,896.20 · APR 6.695% · 0.195 pp above the note rate.

    Interpreting the result

    APR is a comparison tool, not a compounding rate. It spreads the fees across the full term, which flatters short-lived loans: pay the $6,000 loan off in five years and those fees cost far more per year than 0.195 points. If you expect to move or refinance early, compare total fees rather than APR alone.

    Assumptions & limitations

    • The loan runs to term with no extra payments, late charges or rate changes.
    • Fees are paid upfront and financed or paid in cash — either way they reduce the net proceeds.
    • Adjustable-rate margins, prepayment penalties, mortgage insurance and escrow items are excluded.
    • APR is nominal, not effective: it is not compounded monthly the way an APY is.

    Frequently asked questions

    Why is the APR higher than the note rate?

    Because fees reduce the cash you actually receive while the payments stay the same. The lender’s return is therefore higher than the note rate, and the APR expresses that.

    Does APR include taxes and insurance?

    No. Those are escrow items, not credit costs. The related figure that includes them is the note rate plus escrow, sometimes quoted as a monthly payment breakdown.

    Is a lower APR always the better loan?

    Not if you repay early. APR assumes the full term; a loan with high upfront fees and a long term can look competitive on APR but cost more if you sell in three years.

    What is a good APR gap?

    There is no universal number, but on a 30-year mortgage each 0.25 point of APR is roughly 1% of the loan in fees. Compare the fee amount directly for short holding periods.

    Methodology last reviewed 2026-10-21. Results are informational and not financial or engineering advice — see our disclaimer.