Real Estate Glossary

effective interest rate

5 years ago

by Kevin Coulston

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inflation calculator

Written by Kevin Coulston

Expressed as a percentage, effective interest rate is the cost of credit on an annual basis. This includes an up-front payment to acquire the loan. It is typically a higher amount than the interest rate specified in the mortgage note. Effective interest rate is useful in comparing loan programs with different points and rates.

Expressed as a percentage, effective interest rate is the cost of credit on an annual basis. This includes an up-front payment to acquire the loan. It is typically a higher amount than the interest rate specified in the mortgage note. Effective interest rate is useful in comparing loan programs with different points and rates.

About the author

Kevin Coulston