The nominal rate (TAN) is the one in the window. The APRC (TAEG) is the one you pay. Using the example from our calculator, we show where the 0.7 points of difference come from and why only one of them works for comparing banks.
The nominal rate is only half the story
The TAN (nominal annual rate) is the "bare" interest rate. On a variable-rate mortgage it is the sum of the index (the Euribor) and the bank's spread. With the 12-month Euribor for August 2026 (2.954%) and a 1.25% spread, the nominal rate is 4.204%.
It is useful for working out the basic instalment. It does not tell you what the loan costs, because it leaves out everything that is not interest.
The APRC brings everything together
The APRC (annual percentage rate of charge, TAEG in Portugal) includes the interest, initial fees, stamp duty, contract costs and the compulsory insurance (life and home). On the same loan, the APRC comes to 4.9%.
The 0.7 points of difference are insurance and costs. On a €150,000 loan over 30 years, they represent about €17,000 over the term.
Where the 0.7 points come from
- Instalment of interest and capital: €733.88 a month, €264,195 in total.
- Life and home insurance: about €42 a month, more than €15,000 in total.
- Initial fees, stamp duty on the loan (0.6%) and contract costs: about €1,900.
- Total amount payable by the consumer (MTIC): €281,240.
Why only the APRC works for comparing
Two banks with the same nominal rate can have different APRCs: one requires insurance from its own insurer, another charges a higher valuation fee, a third lowers the spread if you domicile your salary and take a card. The APRC captures all of that. The spread does not.
It is also why the law requires the APRC to be shown as prominently as the instalment in any credit advertising. If you see a big instalment and a hidden APRC, be suspicious.
Three things to do with this information
- Ask for the ESIS for each offer and compare the APRC and the total amount payable, not the spread.
- Ask whether you can take out the insurance outside the bank. It is often cheaper and the APRC comes down.
- Use the mortgage calculator: it shows you the indicative APRC next to the instalment, for any amount and term.
Frequently asked questions
Is the APRC fixed for the life of the loan?
No, on a variable rate it changes with the Euribor. The APRC you see in an offer is calculated with the index at that moment and serves to compare offers on the same day.
What is the MTIC?
The total amount payable by the consumer: everything you pay over the life of the loan, capital, interest, insurance, fees and taxes. It is the most honest number of all.
Is a lower APRC always better?
For the same amount and term, yes. If the term is different, compare the total amount payable too: a longer term can have a similar APRC and a much higher total cost.