What is the difference between the interest rate and the A.P.R.?

 The A.P.R. is designed to represent the "true cost of a loan" to the borrower, expressed in the form of a yearly rate.  It's sometimes confusing because the A.P.R. includes some, but not all, of the various fees and insurance premiums that accompany a mortgage.  A.P.R.s can vary from lender to lender and loan to loan.

The A.P.R. on a loan tied to a market index, like a 5/1 ARM, assumes the market index will never change.

A.P.R. can be a guide, but you need a mortgage professional to help you find the best loan for you.

A.P.R.s on shorter term loans will carry a higher relative rate due to the fact that points are amortized over a shorter period of time.