APR Comparison Calculator
Two loans with the same headline APR can still cost different amounts once arrangement fees and term differences are baked in. This calculator takes the loan amount, term, interest rate, and fees for two or three offers and shows the all-in monthly payment, total cost, and effective APR side by side — the only fair comparison.
How is this calculated?
For each offer, fees are either added to the loan balance or paid upfront depending on the lender’s structure, then repayments are calculated using the annuity formula. The effective APR is the rate that makes the present value of all repayments equal the cash-in-hand the borrower actually receives, found by numerical iteration. UK lenders are required by the FCA to quote a representative APR that includes compulsory fees; this calculator lets you replicate that calculation for any offer.
Frequently Asked Questions
Why does the same APR not always mean the same cost?
APR normalises rate and compulsory fees into one figure, but two loans at the same APR can still differ if their terms differ — a longer term means more interest in absolute terms even at the same APR. Always compare the total amount payable as well as the headline rate.
What's the difference between APR and AER?
APR (Annual Percentage Rate) is used for borrowing and includes compulsory fees. AER (Annual Equivalent Rate) is used for savings and shows the effective annual return after compounding. They're essentially the same arithmetic concept applied to opposite sides of the balance sheet.
Are arrangement fees ever worth paying?
Sometimes. A 5-year mortgage with a £999 product fee and a 0.3% lower rate can easily beat a fee-free deal once you've borrowed £200,000+. The break-even calculation depends on loan size — small loans rarely justify hefty fees, large ones often do.
Where do I find the representative APR?
Lenders are required to display it prominently in any UK credit advert. The keyword is 'representative' — at least 51% of accepted applicants will receive that rate, but your personal APR depends on credit score and affordability, and could be materially higher.
Last updated: May 2026 · Rates sourced from HMRC