home loans comparison rate explained for borrowers

What the comparison rate shows

The home loans comparison rate blends the advertised interest rate with most upfront and ongoing fees into one figure. It lets you compare lenders on a like-for-like basis for the same loan amount and term. It's a model, so your cost may differ, but the comparison rate is a useful shortlist filter.

Popular options at a glance

Fixed versus variable

Fixed loans often show a lower headline but can carry break costs. Variable loans may list higher comparison rates if fees bite, yet offer flexibility and offset features. Check whether introductory discounts fade after a set period.

Offset, package, and basic loans

Package loans bundle credit cards and insurance; their comparison rate can rise once annual package fees are included. Basic loans strip extras, often delivering a tighter comparison rate, while offset accounts can lower interest charged even if the rate is higher.

• Match loan amount and term.
• Check application, monthly, annual, discharge fees.
• Note revert rates and break costs.
• Model total cost with realistic repayments.

Use the comparison rate to filter, then weigh features, flexibility, and service to choose a loan that fits you.