**APR (Annual Percentage Rate)** is a useful tool for comparing loans where the interest rate remains constant throughout the term. It provides a single, straightforward percentage that reflects the annual cost of borrowing, including both the interest rate and any associated fees. However, when dealing with mortgages or secured loans where multiple interest rates apply over time, such as during fixed-rate periods followed by variable rates, APR can be less informative.

In these cases, **APRC (Annual Percentage Rate of Charge)** offers a more accurate picture of the total cost. APRC accounts for changes in the interest rate over the lifetime of the loan. It not only includes the initial fixed interest rate period but also factors in the lender’s **Standard Variable Rate (SVR)** that may apply once the fixed term ends.

This makes APRC especially helpful for mortgages, where it's common to have an introductory rate for a few years, followed by a variable rate that fluctuates based on market conditions. By capturing both the fixed and variable interest rates, as well as all associated fees, APRC provides a comprehensive view of the long-term cost of borrowing.

**What it includes:** APRC reflects the total cost of the loan, including interest charges, lender fees, broker fees, and legal costs, over the entire term of the loan. This means it gives you a better understanding of what you’ll actually pay over time.

**How it’s used:** APRC allows borrowers to compare different mortgage or secured loan options, even when they have complex structures involving multiple interest rates. A lower APRC generally indicates a cheaper overall deal, making it a valuable tool for choosing the most cost-effective option.

**When it was introduced:** APRC was introduced by the Financial Conduct Authority (FCA) in 2016 to provide clearer insight into the full cost of mortgages and secured loans. Unlike APR, which is limited to one rate, APRC shows how variable rates and fees can affect the cost of borrowing throughout the term.

**When APRC is not helpful:** While APRC provides a complete picture of the overall cost of a mortgage, there are situations where it may be less useful. For instance, many borrowers switch or refinance their mortgage after the initial fixed-rate period ends, rather than staying on the lender's standard variable rate (SVR) for the remainder of the term.

If you're planning to switch your mortgage after the introductory period (often 2-5 years), the APRC figure may be misleading because it assumes you will remain with the same lender and transition to their SVR for the rest of the term. In reality, most borrowers avoid the typically higher SVR by remortgaging to a new fixed or tracker rate, either with the same lender or a different one.

In such cases, focusing on the initial fixed-rate costs and fees might be more relevant than the overall APRC figure. Borrowers who frequently remortgage every few years to secure better deals may find that the APRC doesn't reflect their actual borrowing costs, as it doesn't account for changes to new rates or deals after the initial period.

**In summary:** While APRC is helpful for understanding the long-term cost of a mortgage, it may not provide an accurate reflection of your total costs if you're likely to switch or remortgage before the variable rate kicks in. In these situations, comparing the upfront fees and initial interest rates will be more valuable in finding the best mortgage deal.