Mortgage Glossary

What is Comparison Rate?

A rate that combines a loan's interest rate with most fees and charges, to make it easier to compare loans.

The advertised interest rate doesn't always reflect the true cost of a loan once fees are included. The comparison rate is calculated using a standardised formula that factors in the interest rate plus most upfront and ongoing fees, based on a standard loan amount and term. It's a useful starting point for comparing loans, though it won't perfectly reflect your own loan amount or term.