Two numbers show up on nearly every mortgage quote, and confusing them is one of the most common ways buyers misjudge what a loan actually costs: the interest rate and the APR.
The interest rate is the percentage used to calculate your monthly principal-and-interest payment — it's the number that directly determines what you pay the lender each month on the loan balance.
The APR, or annual percentage rate, is a broader figure. It wraps the interest rate together with certain lender fees and other finance charges required to get the loan, expressed as a single yearly percentage. Because of that, the APR is almost always slightly higher than the interest rate, and federal law (the Truth in Lending Act) requires lenders to disclose it so borrowers have a standardized way to compare offers.
This is exactly why APR is the more useful number for comparing two competing loan offers side by side — a lower interest rate with high upfront fees can actually have a higher APR than a slightly higher rate with fewer fees. Comparing rate alone can make an offer look better than it really is.
That said, APR isn't perfect for every comparison either — it assumes you'll keep the loan for its full term, which matters less if you expect to move or refinance in a few years. The most reliable way to compare real offers is to request a Loan Estimate from each lender for the same loan amount, rate lock period, and property, and compare them line by line — the standardized format makes an apples-to-apples comparison possible.