An Annual Percentage Rate (APR) reflects the mortgage interest rate plus other costs, which is charged to borrowers and paid to lenders. Many costs are associated with taking out a mortgage. The interest rate is the cost of borrowing the principal loan amount over the whole length of the mortgage term. The APR is a broader measure of the cost of a mortgage because it also includes the interest rate plus other costs such as broker fees, discount points and some closing costs. APR is always shown as a percentage and reflects the yearly cost of borrowing funds over the length of the loan.