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Typical example for calculating annual percentage rate

If a loan of USD 90,000 secured by real estate collateral is granted for the period of 25 years and 300 loan instalments based on the annuity method will be made, the total amount to be paid by such borrower will make USD 175,971.06, monthly instalment – USD 579.35. The annual percentage rate will make 6.33 per cent. Annual percentage rate showing the total cost of a loan is calculated by including the below instalments made within the entire loan period:

• 5.9 per cent yearly variable interest
• USD 450 agreement fee
• USD 8.6 mortgage (pledge) registration fee
• USD 1 per month minimum fee for main banking services
• USD 61 dwelling insurance annual premium

Note. Property valuation costs and the commission for the services provided by a credit intermediary are not included.

Annual percentage rate and the total amount to be paid by the borrower are calculated considering that the loan is disbursed on the agreement signature date and that the terms of the agreement, interest rate and fees do not change within the entire loan period, and the terms and conditions of the agreement are timely implemented. If you fail to fulfil or unduly fulfil the terms of the loan agreement, the risk exists that you may be deprived of the ownership right to the pledged real estate. The mortgaged real estate must be insured in favour of the bank during the entire loan period.