Why Is the Advertised Interest Rate Lower Than Yours?

Bank ads and websites often show “from 3.30%” or “starting rate 3.45%”. By the time you get your own individual offer, that number has almost always moved up. That’s not a calculation error; it’s simply how banks price a loan.

In short:

• “From X%” and “starting rate” mean the floor of the rate card, a price only a customer with the best credit rating actually reaches.
• In our data, the same bank publishes rates for its own “best” credit rating that differ by more than two percentage points, depending on the loan’s term and purpose.
• A more reliable metric for comparison is the APR, which factors in costs that the bare interest rate hides.

What does “from X%” or “starting rate” actually mean?

“From” and “starting rate” mark the floor of the rate card. It’s the price a bank can offer its best customer: someone with an excellent credit history, a comfortable installment-to-income ratio, stable employment, and possibly existing-customer status or an extra package on top.

Addiko Bank spells this out almost word for word on its cash loan rate card: the headline rate is “from X%”, but it’s a representative example for new customers who also move their banking business over. Intesa Sanpaolo uses the term “starting rate” for mortgages and publishes it separately for each term range and for loan-to-value (LTV) up to 80%. You’ll find the current rates for both examples in the “Currently with us” box at the top of this article, which refreshes automatically from our data.

Most customers never reach that floor, which is entirely expected: the bank publishes it as its best-case scenario, not as an offer waiting for you. That’s why on FinPortal.si we specifically flag offers where the bank itself labels the number as a starting or minimum rate, rather than a generally applicable price.

Credit rating classes: how a bank arrives at your number

A bank doesn’t rate you by feel; it uses its own internal model that weighs several things at once. Among them: your credit history in SISBON, income stability, the ratio between your total monthly installment and net income (banks call this DSTI), existing liabilities, and, for a mortgage, the quality of the collateral.

Based on that, it places you into a credit rating class, often labeled with letters (A, B, C…) or numbers. A better class means a lower margin above the starting rate; a worse class means a more expensive loan or, in the extreme, a rejection. The same bank can offer one customer 3.4% and another 4.2% for the exact same amount and term, simply because its model judges the second customer as a higher risk.

This isn’t arbitrary pricing. It’s an attempt by the bank to spread its funding costs and expected losses across customers according to the actual risk each one represents. The problem for the consumer is simply that you don’t know your class in advance, not until you submit an application.

What actually affects your credit rating?

No bank publishes its exact model, since it’s a trade secret, but from banks’ publicly available terms and explanations we can identify the factors that most often count:

• Credit history in SISBON. Past missed payments, even minor ones, stay on record and lower your score.
• Installment-to-income ratio (DSTI). If the new installment, combined with your existing liabilities, would push you past a safe ratio to your income, the bank sees that as a risk, regardless of your past payment record.
• Employment and income stability. A permanent contract and a longer tenure with the same employer are generally seen as a more favorable profile than short-term contracts or self-employment with no track record.
• Existing liabilities. Every open loan, card limit, or lease reduces the room a bank considers safe for a new installment.
• Loan-to-value ratio (LTV) on mortgages. A lower LTV, meaning more of your own funds, typically means a lower rate, because the bank carries less risk if the collateral ever had to be sold.
• Existing-customer status or an extra package, as we cover in more detail in What Does “Existing Customer” Mean for a Loan?.

Some of these factors are within your control fairly quickly (e.g. paying down existing liabilities before applying); others aren’t (your employment history). That’s why it’s worth doing at least a rough self-check before you go to the bank.

A concrete example: how wide the price range is within the “same” rating

The clearest example in our data is DBS. For a consumer loan under the same label, “credit rating A”, they publish several different interest rates depending on the amount, term, and purpose of the loan. You’ll find the current range in the “Currently with us” box above, but the fact alone that it’s a range and not a single number says enough: even within what a bank considers its own best credit category, there isn’t one price. The “same” best rating is nowhere close to meaning a single price.

We see a similar pattern at Intesa Sanpaolo with mortgages. The starting fixed rate differs by term (shorter terms carry a lower starting point than longer ones), and that’s before the bank even looks at your personal credit rating. So the length of repayment alone shifts the starting point, and your credit rating gets added on top of that.

What does this mean in practice? If you see an ad with a starting rate, it’s worth asking which term and LTV that number actually applies to before comparing it to another bank’s offer. Comparing two “starting” rates that actually apply to different terms isn’t a real comparison, even if the numbers look similar.

Why APR and the starting rate are two different things

The nominal, or starting, interest rate only tells you how much interest you pay on the principal. The annual percentage rate (APR) also includes arrangement fees, any required insurance, monthly account or loan management fees, and other recurring charges the bank adds on top.

That’s why the APR is almost always higher than the starting nominal rate, and the gap varies a lot between banks. At DBS, for example, we noticed an interesting detail: the bank doesn’t publish a fee schedule for its cash loan, only a representative example with no arrangement fee. Our comparison therefore calculates DBS’s APR from the nominal rate alone, which means the number shown for DBS is more optimistic than it would be if we had full visibility into all of its costs.

Two banks with the same nominal rate can therefore end up with very different APRs if one has high one-off arrangement fees and the other doesn’t have them, or doesn’t publish them. When comparing loans, the APR is always a better metric than the bare starting rate, though even the APR isn’t a complete picture if a bank doesn’t disclose all its costs upfront.

How we show this on FinPortal.si

On our mortgage comparison and consumer loan comparison, we specifically flag a rate the bank itself labels as a starting or minimum rate with a small “starting rate” tag, so you know it’s a floor, not a price you can count on. We also calculate the APR from all published costs wherever possible, so you get a more realistic picture of the total cost.

The goal isn’t to scare you off a loan, but to make sure you know exactly what you’re looking at when you compare two banks.

You can also check this yourself: in the loan calculator, enter the starting rate first, then a more realistic estimate of your own rate, and you’ll immediately see the difference in your monthly installment and total cost. If you’re more curious about how much loan you can actually afford given your income, check your credit capacity.

What to check before you rely on the advertised price

1. Ask which term and amount the published rate applies to. As we saw with Intesa Sanpaolo, the starting rate can differ quite a bit between terms, even for the same bank and the same product.
2. Ask exactly what “best credit rating” means at that bank, and whether you meet it. It’s better to ask upfront than to be surprised by the offer.
3. Check your SISBON credit report before you go to the bank. It’s free once a year, and it shows you exactly what the bank will see.
4. Compare by APR, not the nominal or starting rate. The APR already includes some of the costs a bare interest rate hides.
5. Remember that an individual offer is a starting point for negotiation, not the final word. If you have stable income, a clean credit history, and maybe another bank’s offer in your pocket, you have room to negotiate better terms.

If you remember only one thing from this article, make it this: the advertised interest rate is an invitation, not a promise. It tells you where the scale starts, not where you’ll land on it. So always compare by APR, not the bare nominal rate, and ask the bank directly what has to be true for you to actually get the number from the ad.

You can review current offers on our mortgage comparison, and run your own scenario in advance in the loan calculator.