CapitoliaTwo hundred thousand euros borrowed, over twenty-five years.
The bank quotes a rate. That is the figure it puts forward, and it is not the one that matters.
Three and a half per cent. So much for the nominal rate.
One thousand and one euros and twenty-five cents a month. Three hundred times over.
A thousand euros a month for twenty-five years. It is the largest commitment of a lifetime.
The nominal rate contains neither the insurance nor the fees. So it does not state the price.
The APRC contains everything. It is the only figure you can compare from one offer to the next.
Let us start with the interest.
One hundred thousand three hundred and seventy-four euros and fourteen cents of interest.
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Download on theApp StoreHalf of what you borrowed, added on top of what you borrowed.
On a long loan, interest is not an extra. It is half the price.
The borrower's insurance, the bank's own: seventeen thousand euros over the term.
The same cover, taken out elsewhere: five thousand.
Twelve thousand euros of difference, for exactly the same cover.
The bank offers its own. You are not obliged to take it, and you can switch at any time.
It is the most neglected item of a loan, and by far the easiest one to bring down.
The arrangement fee. One thousand euros, to fix ideas.
It is negotiable, almost always. It is the only line that falls because you asked.
Interest, insurance, fees. The three pieces of the real cost, on one scale.
Now two offers, and a single question: which one costs less?
The first: three point four per cent, with insurance at zero point forty.
The second: three point six per cent, with insurance at zero point ten.
One hundred and seventeen thousand one hundred and sixty-six against one hundred and eight thousand six hundred and two.
Eight thousand five hundred and sixty-four euros and twenty-six cents of difference.
The higher rate costs less. It is not a trick: the insurance is what decides.
That is why the APRC exists, and why the law requires it to be displayed.
Comparing two nominal rates compares nothing. Compare the APRCs, or do not compare.
And ask for one thing in writing: the total cost of the credit, in euros.