We explain why it's important to know the comparison rate and how it allows you to compare apples with apples.
You may have noticed that lenders and banks always include a comparison rate when advertising a particular interest rate, this is because they are legally obligated to do so. There can often be quite a difference between the interest rate and comparison rate figure.
A comparison rate is made up of fees and charges that are definitely payable throughout the life of the loan. Some of these items include application fees, monthly or annual fees, legal fees and valuation costs. It's always important to see the comparison rate as it highlights a more accurate interest rate and the true fee that is payable, rather than a 'from price'.
It’s important to note that not all features of a loan are included in a comparison rate. Additional features that you may want your Home Loan to include could bump this rate up. Benefits such as redraw facilities, 100% offset accounts or the ability to make extra repayments are not always included, although these can make a big difference when assessing the suitability of a Home Loan.
Let's Finance compares over 30 lenders and more than 800 financial products. For further information, or to book a free appointment, contact us now or call 9315 8888 to speak with a Home Loan Specialist.