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The actual interest rate on a mortgage will always be higher than the annual percentage rate unless the borrower keeps the loan for the full term. Refinancing or selling before the end of the term results in a much higher actual (effective) interest rate. The effective rate on a mortgage can be lower than the annual percentage rate (fixed rate) by paying extra to principal especially early in the mortgage term.

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Q: Is the annual percentage rate usually lower than the actual interest rate on the loan?

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Annual Percentage Rate

The true annual rate of charged interest is called the annual percentage yield. It is the interest charged and compounded against.

Annual interest is interest that accumulates every year. This is a predetermined percentage that is added to a loan or credit card payment.

A measure of the cost of credit expressed as a yearly interest rate.

With compound interest the interest amount is added to the principle and then earns interest as well. This is usually expressed as an annual percentage rate (APR). Simple interest is not added to the principle and does not earn further interest and is used rarely.

Annual Percentage Yield. It means expresses an annual rate of interest taking into account the effect of compounding . It is always greater than or equal to the Annual Percentage Rate [APR]

An annual percentage yield enables one to find out how much interest a set amount of money is earning in interest per year. Many banks and other financial institutions include an interest calculator on their websites.

Annual Percentage Rate (of the interest rate)

The answer will depend on the interest rate. Multiply the annual interest rate (in percentage terms), by 10000/365

Annual Percentage Rate. Refers to the Interest rate paid on a car loan.

Apr =annual percentage rate

A measure of the cost of credit expressed as a yearly interest rate A+

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