text: what is apr as it relates to home loans?   it's the true cost of obtaining the loan in terms of interest rate. the apr will typically be the same or higher than the note rate.  the note rate is the actual rate/payment you pay against the loan.   the fees involved directly raise the rate by virtue of being added to (sometimes subtracted from in the case of a "no fees" loan)the loan balance, after which the apr is calculated.  in most cases , the lower the apr (compared to the note rate), the better.  but not always.  this is a complex issue, and depends on many factors, such as how long you plan to keep the property, etc..  a good loan agent can help you make the choice.