The Annual Percentage Rate of Charge (APRC) is an interest rate calculation that shows you the total amount your mortgage will cost over its lifetime. It can be used to compare different deals.

What to think about when using APRC

When using APRC, remember that the equation to work out the percentage makes a lot of assumptions. These include:
APRC assumes that you will stay on the higher rate a lender offers after your introductory rate ends. This isn’t always the case – you may be able to move onto cheaper rate when the initial period is over.
APRC also assumes that interest rates will not change over the whole mortgage. This is very unlikely to be the case across the entire term.

APRC explained

When buying a home, there are lots of costs to keep track of – it can be difficult to understand how much you will owe. 

Why was APRC introduced?

APRC was introduced by the Financial Conduct Authority in 2016. It aims to give a clear picture about the true cost of getting a mortgage.

It includes:
Fees charged by your lender
Any broker costs
Legal charges
In simple terms, a higher APRC means a more expensive mortgage deal.

What does APRC mean for borrowers?

When you’re searching for a mortgage deal, the APRC must be stated by a lender. It will also be present on broker and comparison websites. 

This is so you’re fully aware of the costs involved and can make a more informed decision about the mortgage you apply for.

Lower or higher percent?

When comparing APRC, a lower number means a cheaper deal. So, if you were comparing two mortgage deals:
One with an APRC of 4.1%
One with an APRC of 4.6%
The first deal is the cheapest overall.

How to use APRC

APRC lets you get a good handle on how much buying a home may cost you in the long-term. 

APRC can be helpful when you’re looking at mortgage deals with introductory rates, which later switch to a higher rate, as well as fees and charges.

For example:
A mortgage deal may look cheaper because it’s got a low rate of interest
But higher fees mean it’s less competitive than it appears.

APRC and introductory offers

When you’re looking for a mortgage, you may notice that lenders offer a lower introductory rate for the first few years.

APRC will factor in this initial rate, but it also considers future rates and other charges, so that you know how much you will pay overall.


These acronyms have two different meanings:
APRC shows you the total cost of a mortgage and related fees over the course of the mortgage term. This assumes that you make no changes to your repayment plan.
APR (Annual Percentage Rate) calculates the cost of borrowing for a single year.
The content on this page is for reference and is not financial advice.
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