Home loan guide
Understand what a home loan comparison rate includes, which costs it leaves out and how to compare repayments and fees for your own loan.
A comparison rate combines a loan's interest rate with most compulsory fees into one percentage. It helps you shortlist loans, but it will not tell you exactly what your own mortgage costs.
I use it as a starting point, then compare repayments and fees using the amount you actually plan to borrow.
A comparison rate combines interest with most compulsory upfront and ongoing loan fees. ASIC's Moneysmart guide recommends comparing the rate, fees and features when choosing a home loan.
It is a standardised comparison, not a personalised quote. It does not include every possible cost or the savings you might make through an offset account or extra repayments.
The calculation uses:
It helps you compare interest and included fees using the same assumptions. You still need the full fee list for the loan you choose.
I'd use the comparison rate to narrow the shortlist, then look at how you plan to use the loan. These features can change which option costs you less:
Our Brisbane mortgage brokers can compare the repayments, fees and features against the way you expect to use the loan.
The interest rate is the rate charged on the money you borrow. The comparison rate adds most compulsory fees to that calculation, using a stated loan amount and term.
A lower interest rate can still come with higher fees. That is why I would check both rates before comparing the dollar costs.
Then check the features you need. An offset balance or extra repayments can affect your interest costs in ways the advertised comparison rate does not show.
The calculation uses the loan amount, term, interest rate, repayment timing and the fees that must be included. For a home loan advertisement, the common example is $150,000 over 25 years. Always read the assumptions beside the rate.
For example, CommBank's comparison-rate warning explains that different loan amounts, terms and fees can produce a different result.
A fixed dollar fee has a larger effect on a small loan than on a large one. The term also changes how long you pay interest and ongoing fees. If you want to borrow $500,000 over 30 years, ask for a cost comparison using those figures.
Check to see if you are eligible for a home loan
Compare rates calculated using the same loan amount and term, then check the dollar costs for your own loan.
Hypothetical fee example: a $500 establishment fee and a $10 monthly account fee add up to $4,100 over 30 years ($500 + $10 × 360), before allowing for any interest effect. A loan with a lower interest rate could still cost more once fees are included.
You cannot calculate a comparison rate by adding an arbitrary fee percentage to the interest rate. The regulated calculation accounts for when repayments and charges occur.
Ask us to compare the repayments, compulsory fees and useful features across your shortlist.
A compulsory fee attached to the quoted product can be included. Do not assume every offset or package fee is excluded: check the product disclosure and compare your total dollar cost.
When two loans have the same interest rate, different comparison rates can flag a difference in their included fees or assumptions. Ask what causes the gap.
I would then compare the repayments and fees for your loan amount. That gives you a more useful dollar comparison.
A low comparison rate is useful, but it cannot choose the loan for you. These are the two assumptions I would check before relying on it.
The comparison rate does not show what an offset balance or extra repayments could save you. Compare the features you will use as well as the quoted rate.
Check the fees attached to those features. A compulsory package or account fee can be included in the comparison rate; do not assume every fee is left out.
Compare the same loan type, amount and term. With a fixed loan, also check the rate the calculation assumes after the fixed period ends.
The advertised figure commonly uses a $150,000 loan over 25 years. Your loan may be much larger or run for a different term.
The rate assumed after a fixed period is not a forecast of future rates.
You may decide to refinance after a fixed period, but it requires a new assessment and can involve costs. Savings are not guaranteed.
Compare the available rate and switching costs before deciding.
Would you like to learn about your situation?
It combines the interest rate and most compulsory upfront and ongoing fees into one percentage, using a stated loan amount and term. It is a comparison tool, not a complete forecast of your costs.
Fees can push the comparison rate above the interest rate. It is not always higher: introductory rates, fixed-rate periods and the assumed rate afterwards can also affect the result.
It uses a prescribed calculation covering interest, included fees and repayment timing. Home loan advertisements commonly use $150,000 over 25 years. Check the warning beside the advertised rate for its assumptions.
Not always. It's a guide based on a sample loan, so your actual costs can differ depending on your loan size, term, and specific fees.
A comparison rate is generally required when an interest rate is advertised for regulated consumer credit, such as a home loan for an owner-occupied property. The rules do not apply identically to every kind of loan or advertisement.
It generally includes application, settlement, monthly, annual, and discharge fees. These are the most common costs that affect the overall cost of your loan.
Government charges and costs that depend on future events, such as late fees or early-repayment costs, are generally excluded. It also does not value benefits such as an offset account. Ask for a full fee list for your chosen product.
It can help you spot a loan where a low interest rate is offset by higher fees. Compare the same assumptions, then ask for the dollar costs on your own loan amount and term.
Yes. A different interest rate, fee or product assumption can change the quoted comparison rate. When reviewing your loan, compare current repayments, fees and features as well as the advertised rate.
They can. A fixed loan's comparison rate generally includes the rate assumed after the fixed period ends. That assumption is not a forecast of future rates or a promise that refinancing will be available.
No, it's just one part of the picture. You should also consider features like offset accounts, flexibility, and repayment options that could save you money.
You can use online comparison tools or speak to a mortgage broker who can compare rates across multiple lenders. A broker can also help match you with loans that suit your goals and budget.
Read More: How to find the Best Home Loan
Send us the loans you are comparing and the amount you expect to borrow. We can help you check the repayments, fees and features side by side.
Call 1300 088 065 or book a free assessment to compare your options.
Checked 30 September 2026.
