The Annual Percentage Rate (APR) exposes the true cost of the mortgage after factors like your interest rate, closing costs and fees, points, and other costs of a mortgage are accounted for. The APR is the nominal interest rate and is higher than the effective interest rate on the loan. It annualizes the extra costs of your loan.
Your loan's APR shows you how much you are being charged after interest compounds on finance charges that you have to pay. It is effectively a much more complete picture of how much extra your loan will cost you every year. APRs are the truthsayers of the mortgage world.