What is Annual Percentage Rate of Charge or APRC?
The APRC (Annual Percentage Rate of Charge) is the total cost of the credit to the consumer, expressed as an annual percentage. You can use this to compare quotes from different lenders as they all have to calculate the APRC in exactly the same way.
The calculation assumes that you keep your mortgage product and provider for the entire term and that the rates shown do not change even if the rate is described as variable.
Example calculations – repayment and interest-only
Loan amount: £125,000
Term: 25 years
Initial rate: 3.5% (fixed)
Initial term: 2 years
Subsequent rate: 5.5% (variable)
Lender fees: £999
With a repayment mortgage you pay off the amount you’ve borrowed, as well as the interest, over the term of the mortgage. The total amount repayable is £225,131.92 (This value takes into account the fees, the interest rates and the term). This means you’d pay back £1.80 for every £1 borrowed. The APRC is 5.3%.
With an interest-only mortgage you pay off only the interest on the loan amount. The loan amount will have to be repaid in full at the end of the mortgage.
The total amount repayable is £292,874.74 (This value takes into account the fees, the interest rates and the term). This means that you would pay back £2.34 for every £1 borrowed. The APRC is 5.4%.