The “rate” is the interest percentage on the money you borrow for your mortgage.
“APR” stands for “Annual Percentage Rate.” There are fees and additional costs that go into your payment. Things like mortgage insurance and closing costs. The number that represents the actual yearly cost of funds over the term of the loan is the APR.
In short, the rate is the interest on the money you borrow. The APR is the rate on the money plus fees and additional costs.
(1) The interest on the portion of the credit extension that is greater than the fair market value of the dwelling is not tax deductible for Federal income tax purposes; and
(2) the consumer should consult a tax adviser for the further information regarding the deductibility of interest and charges