Mortgage offer comparison guide
Mortgage APR vs. interest rate: compare the full Loan Estimate
Learn where the mortgage interest rate and APR appear on a Loan Estimate, what each includes, and which other costs and terms to compare before choosing an offer.
Short answer: should I choose the mortgage with the lowest APR?
Use APR as one comparison measure, not as the only decision rule. The interest rate describes the yearly borrowing rate used to calculate interest; APR is a broader measure that includes the interest rate and certain loan charges. A lower APR can be useful when comparing similar offers, but loan type, rate structure, term, upfront costs, expected time in the home, and the payment you can manage also matter. Compare written Loan Estimates for the same kind of loan and ask lenders to explain differences. Reviewed November 3, 2026. This guide is general education, not personalized financial advice.
Where are the interest rate and APR on a Loan Estimate?
On the CFPB’s Loan Estimate, find the interest rate on page 1 in Loan Terms. Find the APR on page 3 in Comparisons. The interest rate does not include loan fees or other charges. APR is a broader borrowing-cost measure that includes the interest rate and certain charges; its calculation is not a complete prediction of your total cost in every situation. Check that the rate shown is the type you requested and confirm whether it is locked, along with the lock expiration date and conditions.
What should match before I compare two APRs?
Compare offers for the same loan purpose and type, loan amount, down payment, term, and rate-lock period. Interest rates can change daily, so Loan Estimates issued on different days may reflect different market conditions. For an adjustable-rate mortgage, compare the adjustment schedule, caps, introductory period, and possible higher-payment scenario; the APR does not show the maximum interest rate. Do not treat an ARM APR and a fixed-rate APR as directly interchangeable.
What else should I compare besides the APR?
Compare the page 1 loan amount, monthly principal-and-interest payment, whether the payment can change, and any prepayment penalty or balloon feature. On page 2, compare total loan costs, origination charges, lender credits, services, and cash to close. On page 3, CFPB’s five-year comparison can help show principal, interest, mortgage insurance, and loan costs paid over that period, as well as principal paid down. Taxes, homeowners insurance, and other costs can differ by estimate and may not be controlled by the lender, so verify those separately.
Why might a lower APR still not mean the better offer for me?
APR combines the interest rate with certain charges using assumptions about the loan. Points or lender credits can change upfront costs and the rate; a longer term can change payments and total interest; and keeping a loan for less time than assumed can affect how upfront charges compare. Compare the cash you need at closing, scheduled payment, total costs over a time horizon that fits your plans, and remaining balance. If you are comparing a mortgage with a HELOC, note that the CFPB cautions that a closed-end loan APR includes fees while a HELOC APR does not include fees in the same way.
What should I do if the estimates use different assumptions or a number looks wrong?
Ask each lender to provide or explain estimates using the same loan amount, term, product, down payment, and rate-lock assumptions. Ask which charges are included in APR, why points or lender credits differ, and whether taxes or insurance are estimates. The CFPB recommends comparing Loan Estimates from multiple lenders and reviewing origination charges and other cost sections. If your application details or requested loan terms change, ask whether a revised Loan Estimate is needed. Confirm final terms in the Closing Disclosure before closing.
Sources
- CFPB: What is the difference between a mortgage interest rate and an APR? (where to find each and ARM comparison caveats; checked November 3, 2026)
- CFPB: Loan Estimate Explainer (form sections and comparison guidance; checked November 3, 2026)
- CFPB: Compare and negotiate your loan offers (compare estimates and five-year costs; checked November 3, 2026)
- CFPB: Request and review multiple Loan Estimates (same-assumption shopping guidance; checked November 3, 2026)