What is comparison rate?
Comparison rate is a statutory percentage that folds standard upfront and ongoing fees into the headline rate on a $150,000 / 25-year benchmark loan, so different fee structures become directly comparable.
Comparison rate is a percentage that combines the headline interest rate with standard upfront and ongoing fees on a normalised $150,000 / 25-year secured loan. It's a statutory disclosure under the National Consumer Credit Protection Act 2009 — every advertised home-loan rate in Australia must show its comparison rate alongside.
A loan with a 5.79% headline rate and no fees might have a 5.79% comparison rate. The same headline rate with a $395 annual package fee shows a comparison rate around 5.92%. That gap is the fee load made visible.
Two caveats: (1) the comparison rate ignores some fees (LMI, valuation, government charges) by design, so it isn't a complete cost figure. (2) Because it's calculated on a $150,000 / 25-year loan, it can mislead at very large loans or short fixed terms where fee impact differs. It's a comparison tool, not a quote.
comparison rate AAPR · true rate · comparison interest rate
- Principal and interest (P&I) — P&I repayments cover both the interest charged for the period AND a portion of the loan principal, so the loan balance r…
- Fixed-rate home loan — A fixed-rate loan locks the interest rate for a chosen term — typically 1, 2, 3 or 5 years — so repayments don't move wi…
- Variable-rate home loan — A variable-rate loan moves with the lender's pricing decisions and the RBA cash rate cycle — the rate (and your repaymen…
General information only — not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.