Comparison rate
A comparison rate combines the interest rate and most fees into a single percentage, based on a specified loan amount and term, to help compare loan costs.
Comparison rate, explained.
Lenders must show a comparison rate when they advertise an interest rate for most consumer loans, including home loans. It includes interest and most fees, but not every possible cost.
Its weakness is the standard loan it assumes. On a $900,000 loan the fixed fees weigh far less than the calculation implies, and it ignores features such as offset accounts that change what you actually pay. Read it as a comparison tool, not as your actual borrowing rate.
Tools that use this term.
Longer reads from the archive.
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The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
