Why is the gap between APR and rate different for variable vs tracker?

[Petal]

Hi guys,

I am trying to get my head around interest rates and although I understand the different between rates and the APR, I can't understand why for example a "1 year fixed new business rate of 3.08 has an APR of 3.7" whereas a "tracker rate of 3.35 has an APR of 3.4"
I am not sure this makes sense to me, can anyone explain to me how this works?

Thanks for all your help. I feel like I'm getting lost in the jungle of mortgage providers and their untransparent lending terms!!!!

 

[ClubMan]

There are several long and detailed threads that deal with the ins and outs of APRs in case you haven't already found them (by browsing or searching) and read them.

 

[irishpancake]

Hi guys,

I am trying to get my head around interest rates and although I understand the different between rates and the APR, I can't understand why for example a "1 year fixed new business rate of 3.08 has an APR of 3.7" whereas a "tracker rate of 3.35 has an APR of 3.4"
I am not sure this makes sense to me, can anyone explain to me how this works?

Thanks for all your help. I feel like I'm getting lost in the jungle of mortgage providers and their untransparent lending terms!!!!

Here is just one definition of APR from [broken link removed]. Your 1 year 3.08 teaser rate would be very expensive after the first year, when you look at the APR. Naturally, trackers are much closer to the APR, which is probably the best reason to go for them.