APR
The yearly cost of a loan including interest plus most fees, shown as a percentage. Helps compare loans, though it assumes you'll keep the loan the full term.
Every term like this one lights up in the step you're on.
Free to set up. No credit card.Part 1 of 4
Why a seller cares
The APR is the buyer's all-in cost of their loan, and it does not show up in your sale at all. It matters to a seller only when comparing quotes on a loan of your own for the next home.
Part 2 of 4
A simple example
Two quotes for your next mortgage: 6.25% with $6,000 in fees, or 6.5% with $1,000 in fees. The APR folds the fees into one number.
| The quote | What the APR tells you |
|---|---|
| 6.25% rate, $6,000 in fees | A higher APR than the rate, because of the fees |
| 6.5% rate, $1,000 in fees | An APR close to the rate |
| Keeping the loan only five years | The APR overstates the fee-heavy loan's true cost; it assumes the full term |
APR compares loans held to the end. For a short stay, the fees matter more than the number suggests.
Part 3 of 4
What people get wrong
That the APR is what you pay. The rate sets the payment; the APR is a comparison figure that assumes the full term.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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