Loan APR Calculator

What is APR?

APR (Annual Percentage Rate) is the yearly cost of borrowing money, including interest and fees, expressed as a percentage of the loan amount.

APR includes:

• Interest rate
• Arrangement fees
• Broker fees
• Valuation fees
• Legal fees
• Monthly administration fees

APR does not include: Optional insurance, early repayment charges, or late payment fees.

Representative APR

Lenders must show a "Representative APR" which is the rate at least 51% of successful applicants will receive.

Key Points:

• Your personal APR may be different
• Based on credit score and circumstances
• Use for comparison purposes
• Required by UK law for advertising

Example: A loan advertised at 5.9% Representative APR means at least 51% of applicants will get 5.9% or lower.

APR vs Interest Rate

Interest Rate:

The basic cost of borrowing money, excluding fees.

APR:

The total cost of borrowing, including interest and most fees.

Example Comparison:

• Loan A: 5% interest, £500 fees = 5.8% APR
• Loan B: 6% interest, £0 fees = 6.0% APR
• Loan A is cheaper despite higher interest rate

Common Loan Fees

Arrangement Fee:

Setup fee charged by lender (£0-£2,000)

Broker Fee:

Commission paid to mortgage broker (£0-£500)

Valuation Fee:

Cost of property valuation (£150-£1,500)

Legal Fees:

Solicitor costs for mortgage (£500-£1,500)

Monthly Fees:

Account management fee (£0-£10/month)