An Annual Percentage Rate (APR) is the effective interest rate you pay on your mortgage. It differs from the loan interest rate because it includes loan origination costs and discounts applied at the beginning of the loan. 

The APR was introduced by the Truth in Lending Act of 1968 as a requirement for all consumer credit and is a way for consumers to compare loan costs between different lenders. If a mortgage has a stated interest rate of 5%, the APR will usually be slightly higher.