Comparison Rate

Essentially, a comparison rate is a way to help consumers identify the true cost of a loan and today all banks and other lenders are legally required to display a comparison rate when advertising any loan.

It is a rate that includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure.

The comparison rate can help you work the true cost of a loan by reducing the interest rate and most fees and charges to a single percentage figure and is therefore a useful tool for borrowers to compare the cost of different loans from different lenders, however it’s important for investors to consider all of a loan’s features and not just focus on the comparison rate.

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Michael Yardney


Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit