Savings .com.au

Interest rate vs comparison rate

A loan’s comparison rate can help provide a better indication of the cost of a loan by taking both the interest rate and fees into account.

That’s why the comparison rate is usually higher than the advertised interest rate.

By law, each lender is required to display the comparison rate of a home loan next to the advertised interest rate.

How is the comparison rate calculated?

Not all home loans are the same, which is why the comparison rate isn’t always a perfect way of comparing home loans. A home loan comparison rate is uniformly calculated based on an assumed loan amount of $150,000 with a loan term of 25 years, and then factors in the fees the loan has stretched over that time.

Because of these assumptions, the comparison rate should be taken with a pinch of salt. Data from 2019 found the median value of a dwelling in Australia was $516,713 - much more than $150,000 - and home loans can often last for 30 years plus.

Despite its flaws, however, the comparison rate can make it a lot easier for you to compare home loans on costs.

Our home loan comparison rate calculator can help you see how comparison rates are calculated to reflect a loan’s costs.

Comparison rate calculator

To use our comparison rate calculator, enter the following information:

  • The loan amount
  • The loan term
  • The fixed interest rate and the fixed term (if applicable)
  • The ongoing interest rate (not introductory or fixed)
  • Monthly fees
  • Upfront fees
  • A discharge fee (if applicable)

By entering all of this, Savings.com.au’s home loan comparison rate calculator can estimate a loan’s comparison rate, repayments, total fees payable, total interest payable, and the total cost.


Looking for a home loan?

Buying a home or looking to refinance? The table below features home loans
with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
More details
Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
Online ExclusiveUp To $4K Cashback

loans.com.au – Variable Basic Cashback Home Loan (Principal and Interest) (LVR < 70%)

  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
Variable
More details
Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Apply In Minutes

Unloan – Variable Rate Home Loan LVR < 80%

  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Unlimited Redraws

ubank – Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Variable
More details
4.6 Star Customer Ratings
4.6 Star Customer Ratings

loans.com.au – Variable Home Loan (LVR < 90%)

    Variable
    More details
    Flexible Home Loan Options
    • $0 application fee & fast turnaround times
    • Estimate your borrowing power in as little as 1 minute
    Flexible Home Loan Options

    Macquarie Bank – Offset Package Home Loan (Principal and Interest) (LVR 60%-70%)

    • $0 application fee & fast turnaround times
    • Estimate your borrowing power in as little as 1 minute
    Variable
    More details

    ubank – Neat Variable Home Loan (Principal and Interest) (LVR ≤ 80%)

    • Home loan specialists available today
    Fixed
    More details

    Macquarie Bank – Basic Home Loan Fixed (Principal and Interest) (LVR 70%-80%) 3 Years

      Fixed
      More details

      Westpac – Premier Package Fixed Options Home Loan (Principal and Interest) 1 Year (LVR < 70%)

        Variable
        More details

        Commonwealth Bank – Wealth Package Variable Home Loan (Principal and Interest) (LVR 70% - 80%)

          Variable
          More details

          NAB – Base Variable Home Loan (Principal and Interest) (New Customer)

            Fixed
            More details

            ANZ – Fixed Rate Home Loan (Principal and Interest) 5 Years (LVR < 80%)

              Variable
              More details

              loans.com.au – Solar Home Loan (Principal & Interest) (LVR < 90%)

                Variable
                More details

                Heritage Bank – Discount Variable Home Loan ($150k+) (LVR < 70%)

                  Fixed
                  More details

                  Newcastle Permanent – Premium Plus Package Fixed Rate Home Loan Special (Principal and Interest) 2 Years

                    Fixed
                    More details

                    Commonwealth Bank – Fixed Rate Home Loan (Principal and Interest) 3 Years

                      Fixed
                      More details

                      HSBC – Package Fixed Rate Home Loan (Principal and Interest) 4 Years (LVR < 80%)

                        Fixed
                        More details

                        IMB Bank – Fixed Rate Home Loan (Principal and Interest) 3 Years (LVR ≤ 80%)

                          Fixed
                          More details

                          ING – Fixed Rate Home Loan 5 Years (LVR < 80%)

                            Fixed
                            More details

                            Newcastle Permanent – Fixed Rate Home Loan (Principal and Interest) 5 Years

                              Fixed
                              More details

                              Newcastle Permanent – Premium Plus Package Fixed Rate Home Loan (Principal and Interest) 1 Year

                                Important Information and Comparison Rate Warning

                                Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 28, 2024. View disclaimer.