To understand the cost of a mortgage deal, it’s important to understand the different rates quoted. The Annual Percentage Rate of Charge (APRC) is a rate that must be included in any mortgage quotes shown to you, according to Mortgage Credit Directive rules introduced by the European Union to standardize regulations for home financing across the EU.

What does the APRC show?

The APRC estimates your mortgage cost for the entire loan term, including the standard variable rate that would apply after any promotional period and additional expenses such as arrangement fees. It considers both the initial and subsequent interest rates.

When searching for a two-year fixed rate mortgage, the deals you’re offered should show multiple rates. This includes the initial rate during the fixed period, your variable rate after the fixed period ends, and the APRC. These rates give you an idea of what you’ll pay during each stage of the mortgage and the overall cost for comparison.

What is the APRC2?

When a lender recommends a mortgage deal or makes an offer, they must provide an ESIS document that explains the mortgage details. The MCD requires a second APRC, called APRC2, to be included in the ESIS. This is necessary if the mortgage includes a variable rate at any point during its term (such as a tracker rate or standard variable rate).

The APRC2 shows the loan cost using a 20-year high-interest rate as an example. This rate can be based on a benchmark provided by the city regulator (FCA) or a relevant external reference rate.

Which rate is most important when choosing a mortgage?

When comparing mortgages using APRC and APRC2, remember that many people choose to remortgage when their initial rate ends. This allows them to take advantage of competitive mortgage deals instead of switching to their lender’s often more expensive standard variable rate.

For many homebuyers, the initial rate is more important than the APRC when selecting a mortgage because the initial rate indicates the starting interest rate. At the same time, the APRC reveals the rate if you maintain the same deal.

It is recommended to seek professional advice if you are unsure which mortgage deal would be the most cost-effective option.

Frequently Asked Questions

1. What is APRC?

2. Why has APRC been introduced?

3. How useful is the APRC?

4. What is the difference between APRC and APR?

5. How do I get a mortgage with low APRC?

6. How is APRC calculated?

7. How useful is the APRC for comparing the cost of mortgages and secured loans?

8. Who introduced APRC?


  1. What is APRC? | Comparethemarket.
  2. What is APRC? | MoneySuperMarket.
  3. Representative APR explained | Raisin UK.
  4. What Does ‘APR’ Mean On Loans And Credit Cards? – Forbes.
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