What is the Annual Percentage Rate (APR)?

The Annual Percentage Rate, or APR, is the true annual cost of your mortgage expressed as a percentage. Unlike the advertised interest rate, which reflects only the base cost of borrowing, the APR incorporates additional costs such as origination fees, mortgage points, and certain closing charges — giving you a more complete picture of what the loan actually costs each year. Because of this, the APR is almost always slightly higher than the stated interest rate.

When comparing loan offers from different lenders, the APR is one of the most useful tools available because it levels the playing field. Two loans may have the same interest rate but very different APRs if one carries more fees. In the Western Catskills, where buyers are often financing properties with quirks — older construction, private wells and septic systems, or large acreage — lender fees and requirements can vary, making APR comparison particularly worthwhile before committing to a lender.