Using the Comparison Loan Rate
What Is The Comparison Home Loan Rate?
This rate is a government mandated requirement that the lender disclose a more realistic depiction of what you will pay on your home loan. It will provide the total costs a borrower will have to pay. This rate will include all of the fees that are associated with the loan.
For example, a bank may advertise that their loan is offered at 5.40%. After including all of the fees and charges that come with taking out a home loan, the comparison rate is more like 6.75%.
When You Will Find Comparison Rates
Comparison rates can be found when you are searching for credit card or any type of loan that can be used for your home or other domestic reasons. You are also required to see it when you are shopping for home loans. These are fixed term credit loans and means that you will need to have the loan paid back in full within a certain time frame.
This rate must be published in any advertisement for fixed term credit (i.e. home loans).
How Do You Calculate The Rate?
For those that have to include the comparison, the rate is always calculated the same way.
You must include:
- The loan amount
- The Loan term
- The frequency of repayments
- The interest rate
- Any fees and/or charges that are associated with the loan. These charges can include the registration fee for the loan or the stamp duty. Also included should be any fees that MIGHT be charged.
A comparison rate is an incredibly useful tool to help you determine whether or not you can afford a particular loan. It is critical, however, that you take into consideration all aspects of the loan and not just the comparison when deciding which loan to choose.
While the comparison rate is very helpful, it is not exact. It will not take into effect the governmental fees and charges and other fees that might not be known at the time. It does give you a clearer picture, but it’s not the precise number you would pay.
If you are ready to find the comparison rates, you can check them out here.
Related posts:
- What are Home Loan Comparison Rates & How to use them
- 3 Year Fixed Rate Home Loans Comparison
- First Home Buyers Loan Australia – Loans, Special Offers & Comparison
- Home Loan Comparison for Future Home Owners
- 5 Year Fixed Rate Home Loans Comparison
- IMB Fixed Rate Home Loan
- Aussie Optimizer Standard Fixed Rate Home Loan
- Checklist: Home Loan Questions To Ask Before You Apply
- Basic Variable Rate Home Loan Comparison
- Introductory Variable Rate Home Loan Comparison
Top Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Loans.com.au - Dream Catcher | A home loan offer with a $0 application fee and one of the lowest available home loan interest rates. | 5.85% | 6.21% | $0 / $375 | 80% | $50,000 / $750,000 |
 
|
 Bankwest Online Home Loan | A low interest rate home loan with a $0 application fee and ongoing maintenance fees. This offer is exclusively available by applying online. | 5.97% | 5.97% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 State Custodians Mortgage Company Standard Variable Offset Loan | Awarded Mortgage of the Year 2012 – this multi-award winner features 100% offset and a loyalty 0.25% rate drop after 5 years. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
|
 Illawarra Home Loans Bank Beater Home Loan | A low variable rate, beaten down even further by 0.05% p.a. after 5 years. | 6.07% | 6.35% | $0 / $345 | 90% | $250,000 / $1,000,000 |
|
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