Note Rate
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
The note rate is the actual interest rate stated on your mortgage note, used to calculate your monthly payment.
What Note Rate means
It differs from APR, which adds fees, and from the fully indexed rate on an ARM. The note rate is what determines your principal-and-interest payment.
Florida example
A Florida borrower's note rate of 6.75% sets a $2,270 payment on a $350,000 loan, even though the APR shows higher because it folds in closing costs. The note rate is the number on the promissory note.
What it is
The note rate is the actual interest rate written on your mortgage note. It sets your monthly principal and interest payment.
It is different from the APR, which folds in certain fees to show the fuller cost.
Why it matters
The note rate is the number that drives your payment, so a lower one saves money each month. Compare it alongside the APR.
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