Mortgage APR Using the annual percentage rate (APR) to determine the actual cost of the mortgage loan is better than using just the interest rate. This is because APR takes into consideration the discount rate, origination fees, mortgage insurance premiums, and prepaid mortgage interest when calculating the total amount. The Truth in Lending Law requires mortgage companies to disclose the APR on the loans when they advertise their rates. This prevents them from advertising misleadingly low interest rates.