Home loan comparison rates

What does a comparison rate mean?

The use of a comparison rate means it will make it easier for you to compare different home loan products available by multiple lenders. This can be due to the fact that a loan with a lower interest rate, may have a high comparison rate and cost more in the long term due to higher establishment fees,  ongoing costs, or a special rate period. 

Speak to your local Mortgage Choice broker today, to understand how comparison rates work further and ensure you are getting the best loan for your situation. 

How is a comparison rate calculated? 

As per the legal requirements, the comparison rate is calculated by lenders on a loan of $150,000 for a period of 25 years. Included in the comparison rate are any apparent fees at the time comparison rate is disclosed. 

These fees can include: 

• Annual fee (if any)
• Establishment fee (if any)
• Valuation fee (if any)
• Legal fees
• Discharge fee 

It is important to note that not all fees and charges are included in the calculation of a comparison rate as a lender will not include any government fees and charges (e.g. stamp duty), or charges that occur in specific circumstances (e.g. paying the loan off early). 

A comparison rate will only allow comparisons based on cost and does not include other factors offered by lenders, such as flexible payment arrangements, using offset accounts or fee free accounts. 

View our top five interest and comparison rates below or compare thousands of loans we have available here.