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APRC explained
The Annual Percentage Rate Charge (APRC) can give you a clearer picture of your mortgage costs. That way, you know how much your mortgage might cost overall – including any fees. Find out more about what APRC is and how it works.
What is APRC?
APRC stands for Annual Percentage Rate Charge. You’ll usually see this figure as a percentage when searching for mortgage deals.
The APRC covers all the extra fees and charges included in your mortgage costs. This includes your mortgage interest rates, legal fees and any other lender charges.
The figure is based on the full mortgage term. It factors in your introductory rate, followed by the lender’s standard variable rate once the initial deal ends.
Each lender has to include the APRC for their mortgage products so it’s easy to understand the costs involved. It also makes it easier for you to compare different deals from different lenders.
The APRC on a mortgage is based on a range of different fees, rates and other factors.
- Arrangement fees – charged by your lender for setting up your mortgage.
- Valuation fees – the costs of having a property valued.
- Legal fees – any charges for legal work from your provider.
- Broker fees – if you used a mortgage broker, your APRC will reflect their costs.
- Product fees – any up-front costs on your mortgage package.
- Interest rates – both the initial and long-term rates.
We then use these fees, rates and charges to work out the APRC. You see this as a percentage when you search for deals or use a mortgage calculator.
Comparing mortgage rates using APRC
The APRC can be a useful way to get the whole picture on a mortgage deal and compare it to others before you apply for a mortgage.
Let’s say a provider offers a low introductory interest rate, but then also charges a high fee. Using APRC, you can compare the full cost of the mortgage for its entire term, against others.
The APRC only includes the charges and costs set by the bank. But your total costs could be higher. You also need to consider expenses from other parties involved in the sale, such as estate agents and solicitors.
Let’s take a closer look
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The APRC, or Annual Percentage Rate of Charge, shows the total cost of a mortgage for its full term. This includes all fees. The APR, or Annual Percentage Rate, is often used for loans and credit cards. However, it might not give a clear picture of long-term costs.
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The interest rate shows how much it costs to borrow money. It's expressed as a percentage and usually applies for a set period. The APRC gives a clearer view. It includes fees and any changes in rates over the entire mortgage term.
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A lower APRC often means a lower total cost over time, but it may involve longer terms or less flexibility. It’s worth considering your own needs and circumstances, like how long you plan to stay in the property.
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The APRC is higher because it considers what you'll pay after the initial deal ends. This includes the lender's standard variable rate and any fees. It gives a clearer view of the true long-term cost.
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