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Mortgage Rates

Q. What is the difference between a mortgage rate and an APR in Zambia?

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In Zambia, the mortgage rate and APR (Annual Percentage Rate) are two related but distinct concepts. The mortgage rate refers to the interest rate charged on your loan, which is the cost of borrowing the principal amount. On the other hand, the APR takes into account not only the interest rate but also other costs associated with the loan, such as origination fees, administrative fees, and other charges. In Zambia, the APR is usually higher than the mortgage rate because it includes these additional fees. For example, if you’re offered a mortgage rate of 18% per annum, the APR might be 20% per annum once all the fees are factored in. This gives you a more comprehensive understanding of the total cost of the loan. Lenders in Zambia are required to disclose both the mortgage rate and the APR to help borrowers make informed decisions.