Comments on: APR or APY, It Doesn’t Matter http://thefinancebuff.com/apr-or-apy-it-doesn-matter.html like a friend telling you about money ... Fri, 10 Feb 2012 17:31:35 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: johndoe http://thefinancebuff.com/apr-or-apy-it-doesn-matter.html#comment-6551 johndoe Tue, 26 Apr 2011 06:22:43 +0000 http://blog.thefinancebuff.com/?p=146#comment-6551 Does anyone else think our tax structure is a bit warped for encouraging people to maintain debt and avoid saving? Does anyone else think our tax structure is a bit warped for encouraging people to maintain debt and avoid saving?

]]> By: SAHMmy Says http://thefinancebuff.com/apr-or-apy-it-doesn-matter.html#comment-218 SAHMmy Says Sat, 25 Aug 2007 13:25:00 +0000 http://blog.thefinancebuff.com/?p=146#comment-218 I've been meaning to crunch the numbers on APY vs APR--thanks for giving me permission to skip it! I’ve been meaning to crunch the numbers on APY vs APR–thanks for giving me permission to skip it!

]]> By: TFB http://thefinancebuff.com/apr-or-apy-it-doesn-matter.html#comment-204 TFB Wed, 01 Aug 2007 14:25:00 +0000 http://blog.thefinancebuff.com/?p=146#comment-204 The only difference between APR and APY is compounding. Loan rates are quoted in APR to make them look smaller. Savings account interest rates are quoted in APY to make them look larger. That's all.<br/><br/>Mortgage fees etc. are included in the APR. Comparing APRs is not as useful as people think because the quoted APR assumes you will stay with the loan for the entire length of the loan (30 years). The effect of the fees is much larger if one sells their house and pays off the loan every 5-7 years with a new loan and a new set of fees. The only difference between APR and APY is compounding. Loan rates are quoted in APR to make them look smaller. Savings account interest rates are quoted in APY to make them look larger. That’s all.

Mortgage fees etc. are included in the APR. Comparing APRs is not as useful as people think because the quoted APR assumes you will stay with the loan for the entire length of the loan (30 years). The effect of the fees is much larger if one sells their house and pays off the loan every 5-7 years with a new loan and a new set of fees.

]]> By: Ted Valentine http://thefinancebuff.com/apr-or-apy-it-doesn-matter.html#comment-203 Ted Valentine Wed, 01 Aug 2007 13:56:00 +0000 http://blog.thefinancebuff.com/?p=146#comment-203 TFB - I thought APY and APR were actually important when comparing mortgage rates. I've read that origination fees and other lender fees are included in the APY making it better than APR for comparing mortgage loans. Any comment? TFB – I thought APY and APR were actually important when comparing mortgage rates. I’ve read that origination fees and other lender fees are included in the APY making it better than APR for comparing mortgage loans. Any comment?

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