The PRIMARY use of the APRC in relation to housing loans is to:

• A. enable borrower to compare relative cost of different competing loans.
• B. hide additional costs associated with the loan.
• C. enable the borrower to work out the monthly repayments on the loan.
• D. illustrate the benefit of mortgage interest tax relief.

Answer: (A)

APRC provides a standard way to compare the true cost of different housing loans. By including both the interest rate and all upfront and ongoing fees over the loan term, it shows the overall percentage cost, allowing you to compare offers on an apples-to-apples basis. It isn’t meant to hide costs or obscure charges; the idea is transparency so you can see which loan actually costs more in total. It also doesn’t directly tell you your monthly repayments—that depends on the loan amount, term, and nominal rate. And it isn’t about illustrating mortgage interest tax relief. So the primary use is to enable the borrower to compare relative cost of different competing loans.