The calculation of the APR of the mortgage provides a good measure of the costs that will have to be faced for financing the purchase of a property. To obtain a loan, it is necessary to accept an interest rate to be paid to the bank providing the loan: it is the TAN, the nominal annual rate, which expresses the interest that must be paid as a percentage of the capital received. However, the TAN is not the only cost item of a mortgage, as this practice involves other expenses: these are therefore counted in the APR, annual percentage rate.
The APRC thus becomes the main measure to be used to compare the various mortgage offers, without considering only the interests. The costs that are included in the APR calculation are therefore:
- the interests expressed by the TAN;
- the preliminary investigation costs;
- the cost of opening the file;
- the cost of collection of the installments;
- insurance policies, mandatory and non-compulsory;
- any remuneration paid to those who have carried out intermediation functions;
- any fees to be paid to the bank;
- some tax items, such as stamp duty.
Of all the ancillary costs related to the opening of a mortgage, notary fees are excluded from the count. The APR is also expressed as a percentage rate of interest, on an annual basis. For this reason, it must be remembered that for the same amount received on loan and TAN, if a mortgage has a longer duration the APR will decrease, because most ancillary costs will not change. Only periodicals will increase, such as the cost of collection fees, given that the number of payments will increase. Similarly, for the same duration and TAN, the APR will be reduced if the amount received is increased.
The calculation of the costs of the loan could therefore be complicated, given that there are many factors to consider in order to achieve a correct simulation of the loan installment. For this reason, numerous web portals specializing in the calculation of the APR of the loan come to our aid: on these websites it is sufficient to insert some easily available information on the loan to obtain a clear result. The data to be entered is often the amount of the installment (reported in the loan repayment plan), the loaned capital, the duration of the loan and the frequency of the installments. In addition, you must report the amount to be paid for initial and periodic expenses (ie the costs charged on each individual installment).