1. APR vs. Interest Rate: What Is the Difference?

The Annual Percentage Rate (APR) is the global cost indicator for a consumer credit or an installment loan. It includes not only the nominal interest rate but also most of the mandatory fees linked to the credit (for example, some administrative costs or commissions). It therefore reflects the real cost of your financing on a yearly basis.

For mortgage credit, we generally speak about interest rate. Here, the emphasis is put on the nominal rate applied on the borrowed capital. However, there may also be other costs to consider (file fees, possible insurance, notary fees, etc.), which influence the total cost of the operation but are not always directly visible in the headline rate.

In practice, when you compare offers, it is always safer to look at the APR for consumer loans, because two loans with the same nominal interest rate can have very different total costs once all fees are included. For mortgages, a detailed comparison of the conditions (rate, duration, flexibility, guarantees) remains essential.

2. How Are APR and Interest Rates Determined in Belgium?

In Belgium, the minimum and maximum APRs for consumer credit are strictly framed by law. Banks and credit institutions cannot exceed these ceilings, which means that the basic margins are not decided arbitrarily. A credit intermediary, who is not a financial institution, has very limited power on the legal rate itself and mainly acts through their commission.

Since February 1, 2007, a specific calculation method determines the maximum annual percentage rates. At the end of March and the end of September, the authorities verify whether these maximums should be adjusted, depending on the evolution of a reference index of at least 0.75 percentage points. For opening credit, the reference index is the monthly average of the three‑month interbank Euribor rate. The new maximum APRs come into force on the first day of the second month following their publication in the Belgian Official Gazette.

For mortgage loans, several key parameters influence the interest rate offered: the duration of the loan, the risk profile of the borrower, the type of guarantees (mortgage, surety, lender’s privilege), as well as market conditions (interbank rates, monetary policy, etc.). The higher the perceived risk or the longer the duration, the more the credit institution will tend to increase its rate to protect itself against potential defaults.

3. Why Are Mortgage Interest Rates Usually Lower Than APRs on Consumer Loans?

The clear difference between mortgage interest rates and APRs on consumer credit mainly comes from the notion of guarantee. In the context of a mortgage, the bank usually takes a mortgage registration on your property, may have a personal surety, or benefit from a lender’s privilege. These guarantees drastically reduce the cost of defaults for the lender.

Because the bank has a solid security through your property, the risk of losing the borrowed capital in case of non‑payment is significantly lower. As a result, it can afford to offer lower interest rates than for unsecured consumer loans, where the lender has less recourse if the borrower defaults.

On the other hand, consumer credit and installment loans, which do not systematically benefit from such strong guarantees, are statistically riskier. This is why their APRs are usually higher, even if the borrowed amounts are sometimes lower than for a mortgage. The interest rate therefore reflects the balance between risk, guarantee, and loan duration.

4. Main Categories of APRs and Interest Rates

Interest rates vary depending on the type of credit, the repayment duration, and the guarantees offered by the borrowers. As a general rule, the more solid the guarantees and the better the borrower’s profile, the more the institution can offer a competitive rate. The structure of the loan (fixed or variable rate, flexible options, additional products) also plays a role.

Below are indicative categories of APRs typically observed on the market (the exact percentages can change over time and depending on your profile and the institution’s policy):

5. Is the Interest Rate the Only Element to Consider?

No. Focusing solely on the interest rate can be misleading. You must also distinguish between fixed rates and variable rates. A variable‑rate loan often starts with lower installments, but part of the early payments can mainly cover interest. A fixed‑rate loan may be slightly higher at the start, but it generally prioritizes capital repayment, offering more predictability over the entire duration of the loan.

A fixed rate protects you from future increases in market rates: your monthly payments remain stable until the end of the contract. A variable rate can go up or down depending on reference indices and the revision periods specified in your contract; this can be advantageous if rates fall, but risky if they rise sharply.

Beyond the rate structure, you should also examine other aspects: possible early repayment penalties, flexibility options (payment breaks, term changes), mandatory insurance, and any additional fees. A slightly higher rate with more favorable general conditions can sometimes be more beneficial than the lowest rate with rigid conditions.

6. Why Can Interest Rates Differ Between Credit Brokers?

Since the legal framework determines the minimum and maximum levels for APRs, the obvious differences between offers mainly come from the broker’s commission and the partnerships they have with various financial institutions. Some intermediaries may negotiate better conditions with certain lenders, or accept a lower commission in order to offer more competitive rates.

The broker also plays a key advisory role: analyzing your profile, identifying the most appropriate type of credit, and helping you understand the impact of each parameter (duration, guarantees, fixed or variable rate). Two offers at the same nominal rate may not have the same total cost or the same level of flexibility, depending on the structure of the contract.

Choosing an experienced and transparent intermediary therefore helps you secure more favorable conditions and avoid hidden costs. A clear explanation of how your interest rate is built is often as important as the rate itself.

Key Advantages of Understanding Your Interest Rate

A solid understanding of APR and interest rates gives you concrete advantages when you apply for a loan in Belgium. Here are some of the main benefits for you as a borrower in 2026.