Our Retail dept wants to offer a closed end loan with an Introductory Rate or really maybe a low or 0% Interest Rate for the first year that will then convert to a fixed rate for the rest of the term of the loan. Where in Reg. Z does it tell you how to figure the APR on this. I would assume you would have to disclose a composite rate and there is an example of how to do a construction perm as one transaction but this loan will have two separate payment schedules. One payment for the first year and then another payment for the remainder. I know there are tons of formulas in Appendix J but is there some simple way for us to tell our Retail area how to do it verses giving them a complex formula to figure out?

I am posting in order to bring this question back to the top. Is there not anyone out there that can shed some light on this inquiry?

You would calculate the APR in the same way you would calculate the APR for an ARM loan with an initial discounted rate. Using the APR-WIN program, all you need to do is enter in two payment streams, one stream at the initial payment amount and the second stream with payments at the full intetest rate.

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