A mortgage rate is the interest rate charged by a lender on a home loan. A: The interest rate is the cost of borrowing the principal loan amount, while the APR (Annual Percentage Rate) includes the interest rate plus additional fees, giving a more complete picture of the loan’s cost. A: The interest rate is the cost of borrowing the principal loan amount, while the APR (Annual Percentage Rate) includes the interest rate plus additional fees, giving a more complete picture of the loan’s cost.