When you apply for a loan or mortgage, the bank offers two percentages: TIN and TAE. The first is usually smaller and more common in advertising. The second is what really tells you how much the money will cost. Here is what you need to know.
What is TIN?
TIN (Nominal Interest Rate) is the pure interest percentage the bank charges for lending you money, expressed annually.
If the bank says "loan at 6% TIN," it means you will pay 6% per year on the outstanding principal as interest. That is all—nothing more.
The problem with TIN is that it does not include anything else. It does not include the opening fee, the mandatory life insurance, the account maintenance fee or any other loan-related expense.
What is TAE?
TAE (Annual Percentage Rate) is the standardized measure that reflects the real total cost of the loan, expressed as an annual percentage.
TAE includes:
- TIN (pure interest)
- Opening, underwriting or cancellation fees
- Payment frequency (monthly, quarterly, etc.)
- Any mandatory costs to obtain the loan
TAE does not include optional expenses such as voluntary insurance, notary fees or appraisal fees.
Why is TAE always higher than TIN?
Because TAE adds everything. A loan with 6% TIN and a 1% opening fee will have a TAE clearly above 6%.
Real example:
- Loan amount: €10,000
- Term: 24 months
- TIN: 6%
- Opening fee: €200 (2%)
- TIN: 6% | TAE: ~9.2%
The difference can be huge depending on the product.
The golden rule: always compare by TAE
Spanish law requires banks to publish TAE in all advertising. This is the only figure that allows you to fairly compare two different loans because:
- A loan with 5% TIN and a 3% opening fee can be more expensive than one with 6% TIN and 0% fees
- TIN only tells part of the cost; TAE tells the overall annualized cost
Practical tip: when comparing banks, always sort by TAE, not by TIN. The bank that looks cheapest by TIN may be the most expensive in real cost.
Is TAE always exact?
Not entirely. TAE assumes that:
- You keep the loan until the end (no early repayment)
- The interest rate does not change (important for variable-rate mortgages, where TAE is only an estimate based on the current Euribor)
For variable mortgages, the TAE shown by the bank may become outdated within months. That is why variable-rate mortgages often show the variable TAE calculated with the current Euribor plus the agreed spread.
TIN vs TAE in mortgages
For mortgages, the difference between TIN and TAE is usually smaller than for personal loans because opening costs are more regulated since the 2019 Mortgage Law. However, TAE is still the reference point for comparison:
| Bank | TIN | TAE |
|---|---|---|
| Bank A | 3.50% | 3.72% |
| Bank B | 3.30% | 4.15% |
In this example, Bank B has a lower TIN but is more expensive in real terms.
What about TAEA?
For savings products such as deposits or remunerated accounts, you may see TAEA (Annual Equivalent Rate of Savings). It is the same concept applied to the saver side: how much your money earns in a year, including interest compounding.
Calculate the real cost of your loan
Now that you understand the difference between TIN and TAE, use our loan calculator to simulate monthly payments and total interest for any loan, or our mortgage calculator to calculate both fixed and variable scenarios and see the full amortization table.