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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
^
88% - Very Often

Annual Percentage Rate


Synonyms:cost of loan, interest rate comparison, yearly percentage rate
Acronyms &
abbreviations:
APR
Notes:A number used to compare costs associated with mortgage loans and other forms of financing.
Filed Under: financial-banking, mortgages
Tags: finance, interest rates, loan, mortgage
 

Definition of annual percentage rate (APR)

annual percentage rate (APR)
1. A yearly interest rate that includes fees and costs paid to obtain the loan. Lenders are required by law to disclose this interest rate. The rate is calculated in a standard way, taking the average compound interest rate over the loan term, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. There is no APR in an automobile lease; instead, the cost of money is expressed as the money factor.

Related Terms and Acronyms:

  • compounding method   Used in Bank rate tables. These include: S--Simple interest. A--Compounded annually. H--Compounded semi-annually. Q--Compounded quarterly. M--Compounded monthly. D--Compounded daily.
  • interest rate (IR)   The rate a lender charges an individual to borrow money.
  • interest-crediting methods   A number of methods used to establish how interest is accrued, owed and dispersed to the parties due.
  • monthly periodic rate   The interest rate factor used to calculate the interest charges on a monthly basis. The factor equals the yearly rate divided by 12.
  • mortgage rate   The interest rate on a mortgage loan.
      ➥  You can compare mortgage rates using this website by clicking 'Rates' above.
  • note rate   The percentage paid by a borrower for the use of money, usually expressed as an annual percentage on a promissory note.
  • principal and interest (P&I, PI)   Acronym for the elements of a mortgage payment: principal and interest.
  • simple interest (SI)   Interest computed only on the principal balance, without compounding.
  • spread   The difference between the interest rate charged to borrowers and the interest rate paid to depositors.
  • total annual loan cost (TALC)   A method of finding the annual cost of a reverse loan.

More Related Terms and Acronyms

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