# What is the APR of a mortgage?

The APR or annual percentage rate for mortgages is an indicator expressed as an annual percentage which shows the real cost of the mortgage, including the interest rate, but also the bank fees and costs.

The APR is a more complete indicator than the nominal interest rate (NIR), and allows you to compare mortgage loans with different conditions (interest rate, fees, costs, term and form of repayment) and see which is more cost-effective.

## How is the mortgage APR calculated?

The APR or annual percentage rate for mortgages is calculated using a mathematical formula which takes into account the interest that the customer will have to pay, the fees and any other type of costs related to the mortgage loan, with the exception of notary fees. It will also include the costs of services associated with the mortgage loan contract (such as insurance) if they have influenced the granting of the loan under the conditions offered.

In Spain it is mandatory to include the APR in any documentation or advertising of financial products. In the case of variable-rate mortgages, the APR or annual percentage rate is calculated on the assumption that the interest rate and the other costs will remain the same as they are at the time of the calculation. In this case, the bank should use the term "variable APR" for informational purposes.

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