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How to Calculate the Effective Interest Rate Including Discount Points

By Motley Fool Staff – Updated Jul 2, 2025 at 5:14 PM

Key Points

  • APR considers up-front fees to reflect the true mortgage cost, not just interest rates.
  • Calculating APR involves adjusting the loan amount by adding fees to find a new rate.
  • Always compare APRs, not interest rates, to gauge mortgage costs accurately.
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