A mortgage quote carries two percentages, and they count different charges. The Consumer Financial Protection Bureau's page on the difference was last reviewed on August 28, 2026. The interest rate is the yearly cost of borrowing the money, expressed as a percentage. Fees and other charges on the loan stay outside it. The annual percentage rate, the APR, is the wider figure. It includes the interest rate, any points, mortgage broker fees, and other charges paid to get the loan. The Bureau says the APR is usually higher than the interest rate because of those charges.
The interest rate is the yearly price of the money
Points paid up front, a broker's fee, and other charges required to open the loan sit outside the interest rate. Those charges can change without moving the rate. The percentage is the yearly price of the borrowed money.
The APR is where two closed-end quotes pick up the charges
The APR starts from that interest rate and adds the points, the broker fee, and the other charges paid to get the loan. Two closed-end mortgages can show the same interest rate and different APRs, when one loan includes a larger broker fee or more points. The higher APR is the quote that has added more of those charges.
Page 1 holds the rate, and the APR comparison has a product limit
On a Loan Estimate, the interest rate is on page 1 under Loan Terms. The APR is on page 3 under Comparisons. Both lines belong to one form. Each line has its own contents.
The comparison holds for closed-end mortgages and stops at the product type. For an adjustable-rate mortgage, the APR does not reflect the maximum interest rate the loan can reach. A closed-end loan's APR includes fees. A home equity line of credit's APR does not include fees. The Bureau says not to compare those two APRs as if they were the same object. Two closed-end mortgages can sit side by side on the rate and on the APR. An adjustable-rate cap, and a home equity line, stay on their own lines.