See the true cost of a loan including fees as a comparison rate.
A Comparison Rate combines the interest rate with the standard fees and charges on a loan into a single figure, so two loans can be compared on more than the headline number. A loan with a low advertised rate and high ongoing fees can carry a higher Comparison Rate than one with a slightly higher rate and no fees. It exists precisely because the advertised rate on its own is not a reliable way to rank loans.
A Comparison Rate is calculated on a standard example — in Australia, a loan of $150,000 over 25 years. Your loan is almost certainly a different size and term, so the figure is a comparison tool rather than a prediction of your cost. It also excludes some real costs, including redraw fees and early repayment costs, and excludes savings such as fee waivers.
Use the Comparison Rate to shortlist, then look at the actual fee schedule on the loans that survive. For a large loan the interest rate dominates and fees matter proportionally less; for a small or short loan, fixed fees can outweigh a rate difference entirely.
A calculator gives you a starting figure. What a lender will actually approve depends on your income, expenses, credit history and the property, and it varies between lenders. We compare more than 40 lenders on our panel and will tell you where you genuinely stand — see our home loan, refinancing and car loan services, or the suburb pages for Werribee, Tarneit and Point Cook.
Because it folds the loan’s standard fees into the rate. If a loan has no fees, the two figures are close.
It is a good shortlisting tool, but it is based on a standard example rather than your loan, and it excludes some costs. Compare the fee schedule too.
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