If you've ever applied for a mortgage or a personal loan in Spain, you'll have noticed two different percentages sitting side by side on the offer: TIN and TAE. They look similar, they're not the same number, and that gap is exactly what tells you how much the loan is really going to cost you.
TIN: the price tag on the money itself
TIN (Tipo de Interés Nominal) is the plain interest rate — the percentage the bank applies to what you still owe to work out each payment's interest. A mortgage with a 3% TIN means your interest is calculated at 3%.
It's usually the bigger, bolder number in the ads, mostly because it's the lower of the two. On its own, though, it won't tell you the full cost of borrowing: it says nothing about fees, nothing about extra charges, nothing about how often you're billed.
TAE: what it actually costs you
TAE (Tasa Anual Equivalente) is the one that does. It's a legally standardised figure that folds the TIN together with fees — opening fees, arrangement fees, sometimes maintenance charges — and how often payments fall due, all rolled into a single annual percentage.
Because it's standardised, TAE is the number built for comparing offers across banks. Two loans can share the same TIN and still land on different TAEs, simply because one charges an opening fee and the other doesn't, or one bills monthly and the other quarterly.
Spanish law requires every loan or mortgage offer to display the TAE prominently, precisely so fees can't hide behind an attractive TIN.
A quick example
Picture two €10,000 personal loans over 5 years:
| Loan A | Loan B | |
|---|---|---|
| TIN | 6.00% | 6.50% |
| Opening fee | 2% (€200) | 0% |
| Approx. TAE | 6.9% | 6.5% |
Loan A looks cheaper because its TIN is lower. Once you add the opening fee, though, its TAE ends up higher than Loan B's. Go by TIN alone and you'd pick the one that actually costs more.
Why the TIN alone doesn't cut it
Banks know the TIN is the flashier figure, so it's common to see a low TIN offset by higher fees or extra costs tucked elsewhere. This shows up a lot in:
- Mortgages with an opening fee, or ones that only offer the low TIN if you take out extra products (insurance, a card, direct-depositing your salary).
- Personal loans with an opening or arrangement fee that never shows up in the TIN.
- Consumer financing (appliances, cars) where the TIN can be very low, even 0%, while the TAE reveals the fees making up the difference.
So when you're weighing offers, the question isn't "which has the lowest TIN?" — it's "which has the lowest TAE?"
When the TIN still matters
None of this makes the TIN pointless. If you plan to pay off the loan early, the opening fees you've already paid don't come back, so the TIN carries relatively more weight in your real cost the sooner you settle up. And on fee-free loans, TIN and TAE tend to sit close together anyway, so the gap barely matters.
For a quick comparison between offers, TAE is the number that sums up the total cost best. TIN is useful for understanding how your monthly payment is calculated, not for deciding which offer is actually cheaper.
Putting it to use when comparing mortgages or loans
Before signing anything, ask for the European Standardised Information Sheet (FEIN) on any mortgage — by law it has to state the TAE clearly. When you're comparing several offers, jot down the TIN, the fees and the TAE for each one side by side. The last column is the one that decides.
Want to see how your monthly payment and total cost shift with different rates and terms? Try it in the mortgage calculator or the mortgage comparison calculator — plug in different TIN and fee scenarios and see the real effect on your budget.