TIN and APR, what mean these initials and how affect to your financial operations

 

The TIN and the APR are two percentages that are applied to the contracting of different products financial and that involve the payment or charge of a part of the money that intervenes in the operation. We explain you in what are differentiated:

What are the TIN and the APR

The TIN, Nominal Interest rate, is the price that charges the credit institution for providing the money to the client. Is expressed as a percentage on the lent capital and goes referring to a specific period of time (usually annual).

The TIN, can be fixed or variable, according to if it remains or not constant throughout the loan life.

The APR, Equivalent Annual Rate, is an indicator that, in the shape of annual percentage, reveals the all-in cost of a loan or credit, since includes the interest, the expenses and the bank charges, taking into account also the frequency with that these payments are made.

 

The APR serves to compare the offers of different companies.

 

If you want compare different products offers financial, the APR you offers a comparative one more actual since in its calculation includes in addition to the TIN other factors. But take into account that so that the comparison can be equitable the products have have the same duration, in this way will be able to check what option you offers more return or in what offer the costs to pay are superiors.

 

The Banco de España in its website, offers a simulator to calculate the APR of a mortgage or staff.

 

¿What includes the calculation of the APR?

 

The APR is calculated following a mathematical formula established by the Banco de España , that they owe use, and announce, all the companies.

Includes for its different calculation concepts. In the case of a mortgage:

General financial data:

  • Capital of the loan.
  • Total term.
  • TIN (Nominal Interest rate).
  • Opening commission.
  • Appraisal fee.

Initial costs that it generates the financial*product, also in mortgages:

  • Valuation
  • Simple note
  • Expenses of management
  • Expenses of enrollment in the Land registry
  • Taxes (as a Tax of Stamp Duty)
  • Insurance of single premiums

*Expenses of Notary's office are not included in the calculation of the APR

 

Regular expenses that generates the financialproduct, such as:

  • Recurring premiums of insurance. Following on from this, in the mortgages is compulsory to include in the calculation of the APR, the cost of the insurance of damages regardless of where is contracted.

 

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Infographic TIN APR

Differences between a debit card and a credit card

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