Compare Fixed, FHA & ARM Offers by Real APR

When comparing home loans, the interest rate only tells half the story. What you really need is the APR for your home loan. This stands for Annual Percentage Rate.

It shows the true annual cost of borrowing. This includes origination fees, discount points, and PMI or FHA MIP. Use this Mortgage APR Calculator to compare offers fairly and spot the lower-cost option over time.

How It Works

The calculator uses the standard mortgage payment formula:

M = P × r_m / (1 − (1 + r_m)^(-n))

• P = loan amount
• r_m = monthly interest rate (annual ÷ 12)
• n = total payments

Then it adjusts for fees, points, and insurance:

Net0 = P − (points × P) − upfront_fees

P_fin = P + financed_fees

The APR is the annual rate that balances actual cash flows:

NPV(i) = Net0 + Σ [−(M + PMI) / (1 + i/12)^t] = 0

This method of internal rate of return makes sure all costs are included. That’s why APR is more accurate than the nominal rate.

👉 Want to preview payments without fees? Use the bimonthly Mortgage Calculator. For a full breakdown of each year’s balance, see the reverse amortization calculator.

APR Fees List (Mortgage)

Usually included:

• Origination, processing, and underwriting
• Discount/origination points
• PMI or FHA MIP

Usually excluded:

• Title insurance, survey, appraisal
• Escrowed property taxes & homeowners' insurance
• HOA dues, third-party service

FHA Mortgage APR

Wondering how APR is calculated on FHA mortgages? FHA loans add Upfront MIP (UFMIP) (often financed) and annual MIP (monthly). Both are part of the formula, so the FHA APR is usually higher than the quoted rate.

Adjustable Rate Mortgage APR Calculator

For ARMs, the same formula applies, but the payment stream is projected using:

• Introductory fixed rate
• Index + margin after reset
• Caps on changes
• All points and fees

That’s why the adjustable rate mortgage APR calculator gives you a more realistic view than teaser rates alone.

Example Scenarios

• Conventional (points + PMI): $300k home, 5% down, 30-yr fixed at 6.25%, 1 point + $1,500 fees, PMI until 80% LTV → APR ~6.8–7.1%.
• FHA loan: Same loan, UFMIP financed + annual MIP monthly → APR rises above nominal rate.
• ARM (5/6): 5.99% intro, margin + caps, lender fees → APR reflects likely future adjustments, higher than intro rate.

APR vs Interest Rate vs APY

Compare Two Offers

Offer A: Lower rate but high fees/points.

Offer B: Slightly higher rate but minimal fees

This calculator shows which has the lower APR and total cost—Cross-check with the Loan Calculator for non-mortgage comparisons.

Related Tools

• VA Funding Fee Calculator: This tool is for VA loans. It helps you estimate your one-time VA funding fee. The fee depends on the loan type, down payment, and whether it is your first or later use. It also shows possible exemptions. Eligible veterans and active-duty service members can see possible savings.
• APR Calculator: Not just for mortgages. Calculate APR on auto loans, personal loans, or credit cards to compare borrowing costs across different loan types.
• FHA Loan MIP Calculator: Useful for comparing non-mortgage loans like car loans, student loans, or personal financing. Let's test different loan terms and repayment options.
• Early Mortgage Payoff Calculator: See how extra monthly or one-time payments can help you pay off your mortgage quicker. You can save thousands in interest this way.

Disclaimer

This calculator provides estimates only. APR inclusions vary by jurisdiction. Lender disclosures may differ. Results assume full loan term; early payoff changes costs.