APR Calculator · Practical guide
How Much Do Closing Costs Add to APR?
On a typical 30-year mortgage, every $3,000 of closing costs lifts the APR by roughly a tenth of a point.
At a glance
A Rule of Thumb
On a $300,000, 30-year mortgage, closing costs add about 0.03 percentage points of APR per $1,000 of fees. So $3,000 in costs turns a 6.5% rate into a 6.597% APR, and $6,000 pushes it to 6.695%.
Interactive tool
APR Calculator
Enter your own values, then compare the result with the examples below.
APR Results
Fee Impact on a $300,000, 30-Year Loan at 6.5%
| Closing Costs | APR | Monthly Payment | Total Loan Cost |
|---|---|---|---|
| $0 | 6.500% | $1,896.20 | $682,633 |
| $3,000 | 6.597% | $1,896.20 | $685,633 |
| $6,000 | 6.695% | $1,896.20 | $688,633 |
Smaller Loans Feel Fees More
The same dollars weigh more on a smaller, shorter loan because the fees are spread over fewer payments. An $800 fee on a $25,000, five-year loan at 9% raises the APR to 10.40% — a jump of 1.4 points, versus 0.1 points for $3,000 on the 30-year mortgage.
Which Costs Count
APR reflects upfront finance charges: origination fees, discount points, and prepaid finance charges. Third-party costs like appraisals and title insurance are generally excluded. This calculator lumps your finance charges into a single fees field, so total up the lender-charged items and enter the sum.
Frequently Asked Questions
How much are typical mortgage closing costs?
Closing costs commonly run 2% to 5% of the loan amount. On a $300,000 loan, that is roughly $6,000 to $15,000, though not all of it counts as a finance charge for APR.
Do all closing costs count toward APR?
No. Only finance charges such as origination fees and points are included. Fees for appraisals, credit reports, and title services are usually excluded.
Can APR ever be lower than the interest rate?
No. APR equals the interest rate when fees are zero and rises above it whenever fees exist.
Why does a shorter loan term raise the APR impact of fees?
The same fee is spread across fewer monthly payments, so each payment effectively carries more of the cost, raising the annualized rate.