TIN and APR of a mortgage: what they are and why they are so important

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The Nominal Interest Rate (TIN) is the price that a bank charges us for lending us money. In other words, when we apply for a mortgage, the bank takes an amount as remuneration for the service. That is the TIN. Now, what a mortgage costs us in total often goes beyond the price that the bank puts on the money. And that's when the APR comes in . Return to index What is the APR of a mortgage? The Annual Equivalent Rate (APR) is a variable made up of several factors, among which we find the TIN, the expenses and commissions associated with the mortgage and the term of the operation. Thus, the APR is the interest rate that tells us valuable information: the real amount we pay for a mortgage loan . Return to index Simulate your mortgage in a few minutes With our mortgage simulator you can calculate your mortgage payment instantly Calculate fee What does the APR include? In general, the APR includes several expenses of a mortgage transaction : The Nominal Interest Rate (TIN).



The commission for opening a mortgage, if there is one. Products linked to credit , that is, those that the client often contracts in exchange for bonuses. The expenses of the feasibility studies carried out by the bank to analyze your degree of solvency. Return to index Expert tip! There are expenses that are not included in the APR , such as the appraisal, the simple note or the copy of the deed. The APR also does not usually Chinese Overseas America Number Data include early repayment fees , if any. David Espiago Banking Business Director What is the difference between TIN and APR? Both values ​​are related, but they are not the same. These are the main differences between TIN and APR : TIN APR It only indicates the interest rate that the bank charges for lending you money. It is a more accurate value , since it includes the TIN and other expenses related to the loan. It is chosen by the bank and varies depending on the amount, the term and our profile. It is directly conditioned by the TIN , since it is composed of it. It is a value that affects only the monthly fee . It is an annual percentage that encompasses the real cost of the mortgage. As a general rule, the APR is higher than the TIN and the difference will be greater depending on the type of loan and the additional expenses it includes. However, TIN and APR coincide in the event that interest is paid only once, for example at the maturity of a product. Return to index Do you need a mortgage? We negotiate with banks to offer you better conditions I want to discover them What is more important: the TIN or the APR? Both values ​​are important, although, to tell the truth, when taking out a mortgage we are interested in looking at the APR.




The APR homogeneously measures any financial operation on the same annual basis, regardless of its duration. Even if your loan is for a few months, the Annual Equivalent Rate tells you exactly that: how much the cost would be equivalent to one year. And that is why, taking the APR as a reference, we can compare various offers on the market considering their real cost to our pockets. Return to index Expert tip! The APR is exact when we take out a fixed mortgage. In binding offers for variable or mixed mortgages, the APR shown assumes that the Euribor will remain stable throughout the life of the loan, which is rather indicative. David Espiago Banking Business Director Example of TIN and APR in two different mortgages Let's compare two hypothetical mortgage offers , with the following TIN: Mortgage A Mortgage B TIN 2.5% TIN 4% At first glance, one would think that mortgage A is better. However, these loans include the following  conditions : Mortgage A Mortgage B Opening fee: 2% Opening fee: 0.25% Home and life insurance: €140/year Does not require hiring additional services Account maintenance expenses: €34/quarter All these conditions are reflected in the APR of each loan, which, if we look closely, turns out to be the following: Mortgage A Mortgage B APR 6.5% APR 4.5% Thus, we conclude that mortgage A will actually cost us 2% more annually , so mortgage B is better in the long term. Return to index How is the TIN of a mortgage calculated? The Nominal Interest Rate (TIN) is a percentage set by the bank itself when offering loans and is governed by the law of supply and demand. Generally, this interest rate will be higher the more risk the operation poses to your bank. In the case of fixed mortgages, the TIN will be a fixed percentage, while the TIN of variable mortgages is made up of the Euribor + the differential that the bank indicates for its benefit.