Home loan comparison rate vs interest rate
The interest rate is what you pay on the loan. The home loan comparison rate Australia requires lenders to publish is the ASIC figure that includes most fees, so you can compare fee load rather than treat it as a quote for your own loan size. Guidance reviewed 8 September 2026.
What is the difference between the interest rate and the comparison rate?
The interest rate is the percentage applied to your loan balance to calculate interest charges. The comparison rate is the same loan expressed including most upfront and ongoing fees, calculated against a standardised $150,000 loan over 25 years on a P&I basis.
Use the comparison rate to shortlist loans on a like-for-like fee basis. It is not a personalised quote. The statutory definition sits in the comparison rate glossary; this guide is about when that figure helps and when the $150,000 / 25-year model misleads on a real loan.
ASIC requires every advertised mortgage rate in Australia to display a comparison rate alongside it (National Consumer Credit Protection Act, Schedule 1). It exists because two loans with the same headline rate can have wildly different true costs once application fees, monthly account fees, and discharge fees are baked in.
The mandated wording next to that figure, the comparison rate warning, spells out the $150,000 loan over 25 years basis the number is built on, so you know exactly what it does and doesn't capture before comparing two offers.
When is the comparison rate misleading?
The standardised $150K / 25-year basis is now almost laughably low. Most Australian home loans are $400K-$1M+ over 30 years. Fixed-dollar fees (a $395 annual package fee, say) are amortised over a much longer balance and term in real life, so the comparison rate overstates the impact of those fees.
It also doesn't include cashback, discharge fees, break costs, or LMI. For investors or refinancers, the comparison rate is a starting point: model extra repayments on your actual balance with the extra repayments calculator, then check refinance home loans or the refinance savings calculator against the loan you already hold.
Use comparison rate to filter out obviously fee-laden loans. Use a real repayment calculation against your actual loan size to make the final call.
Why we sort by comparison rate by default
When you compare home loan rates Australia, every leaderboard on Ratesniffers sorts by comparison rate ascending. It's the closest single-number proxy for total cost that ASIC mandates lenders publish, so it's the only sort order that's apples-to-apples across every lender we track. The Australian home loan rate index uses the same comparison-rate ranking for its advertised 80% LVR sample.
What does a comparison rate include and exclude?
A comparison rate includes the interest rate plus most standard upfront and ongoing fees on the statutory $150,000 / 25-year principal-and-interest example. It excludes lenders mortgage insurance, many government charges, cashback, discharge fees and break costs. Use it to compare fee load, not as a complete cost of your own loan.
Two loans with the same headline rate can show different comparison rates when one carries a package fee or an application fee. That gap is the point of the figure. It is still not a quote for a larger loan or a different term.
Why is the comparison rate based on $150,000 over 25 years?
ASIC requires that standardised example so advertised rates can be compared on the same loan size and term. Most Australian home loans are larger and often run for 30 years, so a fixed-dollar fee looks heavier in the comparison rate than it does on a larger balance.
That is why the comparison rate is a filter, not the last step. After you shortlist, model the scheduled payment and any extra repayments on your actual balance and remaining term.
When should I use a repayment or extra-repayment calculator instead?
Use the comparison rate to shortlist products on a like-for-like fee basis. Use a real repayment calculation when you need the scheduled payment on your balance and term. Use the extra repayments calculator when you want to see how additional monthly payments or a lump sum change interest and payoff time in a monthly model.
Neither calculator replaces the comparison rate, and the comparison rate does not replace a model of your own loan. They answer different questions.
A well-known direct-to-consumer brand that regularly publishes a comparison rate near the sharp end of the market is ING's current rates. For a customer-owned alternative, see Newcastle Permanent's current rates. Newcastle Permanent's NGM Group sibling, also publishing its own comparison rate, is Greater Bank's current rates.
HSBC is exiting Australian retail banking and is not open to new borrowers. Existing-customer rates remain listed at HSBC existing-customer rates. Smaller customer-owned mutuals publish a comparison rate for every product too, among them The Capricornian's current rates. For another small mutual publishing the same figures, see GMCU's current rates.
A fourth customer-owned mutual publishing its own comparison rate is Maitland Mutual Limited's current rates. A fifth, this one an Adelaide-based mutual publishing a comparison rate on every product, is Credit Union SA's current rates.
Home loan comparison rate vs interest rate: frequently asked questions
What is the difference between the interest rate and the comparison rate?
When is the comparison rate misleading?
Why we sort by comparison rate by default
What does a comparison rate include and exclude?
Why is the comparison rate based on $150,000 over 25 years?
When should I use a repayment or extra-repayment calculator instead?
References
- ASIC RG 234: Advertising financial products and services (including credit), Comparison-rate disclosure rules
- National Consumer Credit Protection Act 2009 (Schedule 1), Statutory comparison-rate basis ($150k / 25 years)
- ASIC MoneySmart: Comparison rates, Plain-English consumer guidance