Interest Rate v APR

[thespecialon]

just looking at my mortatage acceptance agreement with my bank.On the first page it says APR 4.8%, then later on it says interest rate 4.7%?Can someone clarifiy the difference?My mortatage is ECB +.95%, I received this letter before the last interest rate increase so it has gone up in the interim.

 

[Brendan Burgess]

The 4.7% is the nominal rate. Each day, they charge you 4.7%/365 on the outstanding balance. If you borrow 100,000 and make no repayments during the year, you will owe 104,800 at the end of the year.

Brendan

 

[ClubMan]

How can ECB (4%) + 0.95% = 4.95% equal 4.7% nominal or 4.8% APR?!

 

[oysterman]

How can ECB (4%) + 0.95% = 4.95% equal 4.7% nominal or 4.8% APR?!

OP said it was before the last rise.

So ECB 3.75 + 0.95 = 4.7% then (and 4.95% now).

 

[ClubMan]

Ah - I see. Thanks.