On 21 March 2016, the European Banking Authority (EBA) published a final report (EBA DC 145), setting out a decision which specifies the formula to be used by creditors when calculating the benchmark rate under Annex II to the Mortgage Credit Directive (2014/17/EU). 

In order to help consumers compare the characteristics of credit products, in some circumstances, creditors are required to use a benchmark rate specified by the EBA for the illustrative examples in the European Standardised Information Sheet for variable rate mortgages.  This applies specifically to the annual percentage rate of charge and the maximum instalment amount. 

The formula includes an underlying rate which will be the European Central Bank rate for eurozone countries and the national central bank rate for non-eurozone countries.  This means that the rate will be specific to each member state and will remain up to date over time.  The EBA rate will only apply where no national rate has been set. 

The EBA formula will apply 20 days after its publication in the Official Journal for the European Union, but creditors can choose to use the formula before this date.  The EBA consulted on the proposed rate in October 2015.