Annual Percentage Rate (APR)

Annual Percentage Rate (APR) is the standardised cost of credit. It bundles the headline interest rate together with mandatory fees — arrangement, valuation, broker fees and the like — and expresses the total as one annual percentage. Two loans with the same nominal interest rate can have very different APRs once the fees are folded in, which is why APR is the comparison figure required by Irish consumer credit law.

APR isn’t quite the same as the cost shown on a mortgage offer. Variable-rate mortgages quote an APRC (Annual Percentage Rate of Charge), which assumes the current rate holds for the full term. Short-term consumer loans, by contrast, can show eye-watering APRs because flat per-month fees compound aggressively when annualised — a 30-day “small loan” charging a small fixed fee can clock in at hundreds of percent APR.

When comparing offers, line up the APRs of two products with the same loan amount and term: it’s the only figure that captures both the rate and the cost of getting the credit in place. Use the APR comparison calculator to compare side-by-side, or the loan repayment calculator to model the monthly payment.