Annual percentage rate for credit agreement
 55. (1) For the purpose of the definition of “annual percentage rate” in section 66 of the Act, (a)  the annual percentage rate for a credit agreement is the annual interest rate set out in the credit agreement, if, (i)  the credit agreement does not provide for interest to be calculated more frequently than the frequency with which scheduled payments are required to be made by the borrower, and (ii)  there is no cost of borrowing, other than interest, in connection with the credit agreement; and (b)  the annual percentage rate for any other credit agreement is the amount determined using the formula, [C ÷ (T × A)] × 100 in which, “C”  is the cost of borrowing, “T”  is the length of the term of the credit agreement, in years, and “A”  is the average of the principal balances outstanding at the end of each interest calculation period during the term of the credit agreement before applying any payment due by the borrower, with all interest calculation periods under the credit agreement being of equal length. O. Reg. 17/05, s. 55 (1). (2) In calculating “A” in clause (1) (b), (a)  the principal outstanding at the beginning of the term of the credit agreement is the result obtained by subtracting the total of all payments made by the borrower at or before the beginning of the term from the total of all advances received by the borrower at or before the beginning of the term; (b)  principal does not include any portion of the cost of borrowing, and no portion of the accumulated cost of borrowing shall be included in the principal balance outstanding at any time; (c)  each payment by the borrower in connection with the credit agreement shall be considered to be applied first against the accumulated cost of borrowing and then, to the extent that the payment exceeds the accumulated cost of borrowing, against the outstanding principal balance; and (d)  applying the following formula in respect of each interest calculation period shall yield a result that is equal to the cost of borrowing for that period, APR/100 × L × P in which, “APR”  is the annual percentage rate, “L”  is the length of the interest calculation period as a fraction of a year, and “P”  is the principal balance outstanding at the end of the interest calculation period before applying any payment due by the borrower. O. Reg. 17/05, s. 55 (2). (3) In calculating the annual percentage rate for a credit agreement, a year shall be considered to have 365 days.  O. Reg. 96/09, s. 4. (4) If a credit agreement provides for payments to be made at intervals measured by reference to weeks or months, the annual percentage rate for the credit agreement may be calculated on the assumption that each week is 1/52 of a year long and each month is 1/12 of a year long.  O. Reg. 17/05, s. 55 (4). (5) If the annual percentage rate for a credit agreement is required to be calculated when the interest rate for any period during the term of the credit agreement is unknown, the annual percentage rate for the credit agreement shall be calculated as if the interest rate for that period was to be determined on the basis of circumstances existing at the time of the calculation.  O. Reg. 17/05, s. 55 (5). (6) The annual percentage rate for a credit agreement for fixed credit that does not provide for scheduled payments by the borrower shall be calculated on the assumption that the outstanding balance will be repaid in full in a single payment at the end of the term of the credit agreement.  O. Reg. 17/05, s. 55 (6). (7) The annual percentage rate for a renewed credit agreement shall be calculated on the assumption that the borrower receives, on the renewal date, an advance equal to the outstanding balance at the end of the term of the credit agreement being renewed.  O. Reg. 17/05, s. 55 (7). (8) In subsections (3) to (7), the references to the calculation of the annual percentage rate include the calculation of any amount that is required to be calculated in order to calculate the annual percentage rate.  O. Reg. 17/05, s. 55 (8). (9) A disclosure of an annual percentage rate for a credit agreement shall be considered to be accurate if it is within one-eighth of one per cent of the annual percentage rate calculated in accordance with this section.  O. Reg. 17/05, s. 55 (9).