APRC
Last checked UK · illustrative onlyNot a lender or brokerAboutDisclaimer
Published by Rodway Labs — not a mortgage adviser
Published · Last revised
APRC: The annual percentage rate of charge — a figure on a mortgage illustration that folds the interest rate and certain fees into one percentage, on stated assumptions.
The APRC is worked out on standard rules that assume you keep the mortgage for the whole term, including the years on the follow-on rate after any fixed period. It is a comparison figure. Your monthly payment is based on the initial rate, not the APRC.
Example: a lower rate that costs more over 24 months
- Mortgage
- £185,000 over 22 years, switch timed after the current deal ends (no ERC)
- Product transfer at 6.22%, no fee
- about £1,288 a month · about £22,525 interest over 24 months
- New lender at 5.97%, £1,499 fees less £250 cashback
- about £1,260 a month · about £21,605 interest + £1,249 net fees = £22,854
- Result over 24 months
- the lower-rate deal is about £329 more expensive
Illustrative only, using the site calculators. Each deal’s APRC would differ from its headline rate because fees and the follow-on rate are folded in. We do not calculate an APRC here: it depends on each lender’s follow-on rate and fee treatment, so read it from the illustration.
How it affects a remortgage
Many people switch again when a deal ends, so a whole-term figure can point a different way from the cost over the period you actually expect to keep the deal. In the example, the fee-free deal at the higher rate wins over 24 months.
Use the APRC as a cross-check between illustrations, then do the comparison that matches your plans: fees and any early repayment charge first, then the rate, over the same horizon for every option.
Do not type the APRC into a payment calculator unless you mean to. Use the initial rate for the deal period and read the follow-on rate separately.
Example: what the APRC folds together
- Deal-period payment at 5.97%
- about £1,260.41 a month on £185,000 over 22 years
- Payment if the example 7.13% applied afterwards
- about £1,390.18 on the full £185,000 (less in practice, as the balance will have fallen)
- Product fee as a share of the loan
- £999 ÷ £185,000 = 0.54%
- What the APRC does
- spreads the fees and the follow-on rate across the whole term into one percentage
Illustrative only. We do not calculate an APRC: it depends on each lender’s follow-on rate and fee treatment, so read it from the ESIS.
Common mistakes
- Comparing one deal’s APRC with another’s headline rate. Compare APRC with APRC, and rate with rate.
- Using the APRC for a two-year decision. It assumes you keep the mortgage for the whole term, which few people do.
- Assuming it covers every cost. The ESIS lists costs the lender does not know about, which are not included in the APRC.
- Reading a variable APRC as fixed. For variable rates the ESIS has to warn that the actual APRC could differ if the rate changes.
Edge cases
- Fixed for an initial period. MCOB 5A requires a warning that the APRC is calculated on the initial rate, together with an additional illustrative APRC.
- Variable rates with no cap. The ESIS has to show an illustrative APRC at the highest rate in at least the last 20 years, or at the FCA’s benchmark rate where the lender does not use an external reference rate.
- Fee added or paid. Adding the fee changes the loan amount shown on the illustration, so ask for an illustration each way if you are weighing both.
- Two deals with the same APRC can still differ a lot over 24 months, because the APRC weights the follow-on years heavily.
Where to go next
- How to read an illustration — where the APRC, fees and ERC sit.
- Remortgage vs product transfer calculator — the 24-month comparison with your own figures.
- Mortgage repayment calculator — monthly payment from the initial rate.
- How much does it cost to remortgage? — the fees that feed into the APRC.
Sources checked 2 November 2026
- FCA Handbook MCOB 5A (ESIS rules) — what an ESIS must contain, when it must be given, and how the APRC and early repayment sections are completed.
- Financial Conduct Authority (FCA) — the regulator’s consumer page on mortgages, rate changes and arranging a new deal.
- MoneyHelper — independent, government-backed guidance on remortgaging, fees and switching deals.
Figures marked example are illustrative only, not a quote and not lender, broker or FCA-regulated advice. Definitions are plain English for this site, not the wording in your offer. The definitions and explanations are in our own words. Last checked 2 November 2026.