TAE
For the purposes of home loans, the TAE or Annual Effective Rate corresponds to the annual cost of the bank loan, depending on the amount owed.
The TAE accounts for costs associated with the loan application such as interest, processing costs and commissions. However, the TAE does not reflect insurance charges and other products associated with home loans.
It is normally used as a benchmark for comparing banks, as it allows for a more rigorous analysis of the total cost of interest associated with mortgage loans.
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