mortgage rate v apr

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Philip2005

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I was looking at the discount tracker rate of 2.70% for bank of scotland ireland and I notice that (3.20) apr in brackets see below.


** Based on a Bank of Scotland (Ireland) discount tracker rate of 2.70% (APR 3.20%) for loans <=75% LTV for a 2 year period.

So how can they quote 2 different rates like this. How is the lower rate worked out?
This seems to be me to be very misleading so you think you are getting a better deal than you are.
 
They are obliged to quote the APR, and this (or cost per thousand) are really the only basis you have for comparing the cost of a mortgage (the nominal is largely irrelevant).

There is plenty discussion of APR, look at the Key Posts, browse or search for more.
 
Have you checked the previous long and detailed threads about nominal rates versus APRs versus costs per thousands etc.?

Post crossed with CCOVICH's.
 
The discount rate is the rate you pay for the discount period.
The APR rate is the average rate you pay over the period of the mortgage assuming no other increase in the actual rate.
You need to find out the actual rate after the discount period. I would estimate approx 3.25%. This rate is probably variable so with interest rate rising at present expect this to rise also when the discount period ends
 
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