Differences in "Nominal Rate" vs APR, esp for fixed mortgages

A

airdd

Guest
Hi,

I have an investment property with a variable interest-only loan from AIB.

I'm thinking of fixing, but all the tables of mortgage rates that I look at quote two rates: The "Nominal Rate" (Or "Gross Rate") and the APR.

In the case of an interest-only mortgage is there any difference between the two? In the case of 3yr and 5yr fixed rate mortgages from AIB it seems that there is a difference (AIB 3yr: Nominal Rate 3.75%, APR 3.49%), however there is no difference for variable or tracker rates.

I guess I don't fully understand the difference between "APR" and "Interest Rate", especially concerning an interest-only loan.
 
Use the search to find previous discussions about APRs and nominal rates etc. The short answer is that you should ignore the nominal rate and only compare loans based on their quoted APRs (or cost per thousand based on comparable criteria - e.g. term).
 
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