Disclaimer – Interest Rates
Interest Rates are correct as at 20th Jan 2021 and subject to change at any time. When it comes time to choosing between lenders, it’s important to be able to compare apples with apples. While interest rates are a great starting point for comparing loan products, they don’t reflect the full cost of a loan, which will include various fees and charges. So lenders must display a comparison rate when advertising their home loan rates.
In theory, the comparison rate gives you apples where interest rates can deliver a mixed fruit bowl. The rate is calculated by adding the interest rate with all other applicable fees (for example monthly account, establishment, valuation and settlement fees) and representing this as a single percentage figure.
A comparison rate is considered a more accurate reflection of the cost of a loan than the interest rate; however, it doesn’t cover government stamp duty, conveyancing fees, break costs or the cost of special loan features like offset accounts.
Comparison rates help borrowers estimate the total cost of a loan when comparing it with similar loan products.