Interest Rate vs APR

[Ryan Butler]

Hey Everyone! In the process of buying my first house & trying to make a house hack work in the Boston area.

My question is pretty simple -- when I run analysis through the BP Calculator and I enter the Interest Rate, should I be entering actual Interest Rate or APR? I've asked my lender for his interest rate estimate a few times to keep my projections correct but when he draws up an offer letter for me the APR is around a full percentage point higher than the rate estimate he gave me, although the estimate is always in line with the actual interest rate on the offer sheet.

Obviously a full percentage point makes a huge difference in how the analysis looks. My understanding is that the APR is the actual rate I will be paying for the life of the loan and includes fees from the lender. But does the BP calculator already take into account these fees? Also, is a full percentage point higher for APR vs interest rate a normal amount or should I be looking at other lenders? (Mortgage is an FHA)

Would love to hear some thoughts on this.

Thanks!!