Comparison rate

A comparison rate is designed to help you understand the overall cost of a home loan, including fees and charges from the lender.

For example, a 3.50% interest rate at Lender A with high fees has a comparison rate of 3.85%. Lender B’s higher interest rate of 3.65% with lower fees has a comparison rate of 3.75%. This means Lender B is the cheaper option even though the interest rate is higher.

It is important to bear in mind that the comparison rate will be based upon a standard set of criteria which might not align with your circumstances.