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APR to APY Calculator | UK
APR to APY Calculator is designed to help you estimate borrowing costs, compare repayment scenarios, and sense-check property finance decisions. It works best when you want a fast, comparable estimate before you speak to a lender, provider, adviser, employer, or supplier. Use it as a planning tool rather than a final quote. This version is framed for United Kingdom users where regional assumptions matter, so you can test a few scenarios and see how changes in the main inputs affect the outcome.
Interpretation
What your result means
Use the notes below to understand the main figures in your result and when this calculator is most useful.
When to use this calculator
- Before comparing lenders, brokers, or repayment options.
- When you want to test how a different deposit, rate, or term changes affordability.
- When you need a quick estimate before using a formal quote or agreement in principle.
Result
Use this metric to compare scenarios side by side and understand how the key drivers affect the final outcome.
Next steps
What to do next
Continue with the most relevant next step based on your result.
Example
A realistic UK planning example
A realistic example to help you understand how the numbers fit together.
APR (%)
5%
Compounding Periods Per Year
25 years
After entering these figures, focus on result first and then rerun the tool with a more cautious assumption.
Avoid mistakes
Common mistakes
A few things that often lead to misleading or incomplete results.
FAQ
Frequently asked questions
Helpful answers to common questions about this calculator.
What is the difference between APR and APY?
APR (Annual Percentage Rate) is the simple annual interest rate without compounding. APY (Annual Percentage Yield), known as AER in the UK, includes the effect of compounding and is always equal to or higher than APR.
What is AER and how does it relate to APY?
AER (Annual Equivalent Rate) is the UK term for APY. It shows the actual return on savings or cost of borrowing when compounding is factored in, making it easier to compare financial products.
Why does compounding frequency matter?
More frequent compounding (daily vs monthly vs annually) produces a higher effective yield from the same APR. The difference becomes more noticeable at higher interest rates and over longer periods.
Which rate should I compare when choosing a savings account?
In the UK, always compare AER (equivalent to APY) rather than the nominal rate. AER accounts for compounding differences, giving you a true like-for-like comparison between savings products.
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