Comparison rate

A comparison rate is a standardised interest rate that incorporates most of a loan’s fees and charges — such as establishment fees, monthly fees, and annual fees — in addition to the advertised interest rate. It is designed to help borrowers compare the true cost of different loan products.

How comparison rates work

In some jurisdictions, lenders are required to disclose a comparison rate alongside the advertised rate. Where disclosed, comparison rates are typically calculated on a standardised example loan amount and term so borrowers can compare products on a like-for-like basis.

Limitations of comparison rates

• Calculated on a standardised example loan — may not reflect your actual loan size or term
• Does not include all fees (e.g., redraw fees, early exit fees may be excluded)
• Does not account for offset accounts or variable rate changes
• A lower comparison rate does not always mean a better deal for your specific situation

Practical use

Use the comparison rate as a starting filter when comparing loan products, but always request a full fee schedule and calculate the total cost over your actual loan term and amount. Always consult a qualified mortgage broker before making a borrowing decision.