Loan features
Comparison rates explained
Understand why comparison rates can help, what they include, and why they still do not show every borrower outcome.
Key checks before you decide
Reviewed by emoney broker team. Updated 29 July 2026. Sources are listed below.
- Compare the advertised rate, comparison rate, fees, features, cashback, and borrower fit together.
- Check which costs are included in the comparison rate and which costs or benefits are excluded.
- Use repayment and refinance calculators to test the rate in a realistic borrower scenario.
- Ask whether lender policy, documents, loan purpose, and timing make the option practical.
In this guide6 sections
Comparison rates help reveal some costs
A comparison rate can help because it puts the advertised interest rate and certain fees into one figure. That can make a loan with a low headline rate and higher included fees easier to compare against another option.
It gives an early reference when scanning several loan options and reduces the risk of looking only at the advertised rate while missing establishment or ongoing costs included in the comparison.
It is still only one input. A loan with a lower comparison rate may not fit the borrower's feature needs, income type, property, timing, or lender policy.
Use the comparison rate to slow the decision down, not to make the decision automatically. It should prompt the borrower to ask which fees are included, which assumptions were used, and which costs or benefits still sit outside the number.
| Comparison point | What it helps show | What still needs checking |
|---|---|---|
| Advertised interest rate | The headline rate used to calculate interest. | Fees, features, eligibility, revert rates, and borrower-specific pricing. |
| Comparison rate | A rate that includes certain fees and charges under standard assumptions. | Offset behaviour, cashback, package value, loan purpose, and non-standard borrower scenarios. |
| Upfront fees | Some application, valuation, or establishment costs. | Whether the fee is waived, added to the loan, or replaced by another cost. |
| Ongoing fees | Package, annual, account, or feature costs over time. | Whether the borrower will use the features enough to justify the cost. |
| Switching or exit costs | Some refinance costs that affect the payback period. | Discharge, break costs, settlement timing, and current-lender alternatives. |
- Check the advertised interest rate.
- Check the comparison rate.
- Check application and ongoing fees.
- Check the assumptions behind the comparison.
Watch out
They do not capture every feature
Comparison rates do not show the whole borrower outcome. OffsetHome Loans / Loan decisionsOffset vs redrawCompare how offset accounts and redraw may affect interest, access to cash, and loan structure decisions.Open page use, redraw access, cashback offers, package value, repayment behaviour, loan size, and loan term can all change the practical result.
A feature-rich loan can carry extra cost that is worth discussing if the borrower will actually use the features. A simpler loan can look cheaper but may not have the flexibility needed for extra repayments, offsetHome Loans / Loan decisionsOffset vs redrawCompare how offset accounts and redraw may affect interest, access to cash, and loan structure decisions.Open page , or future review.
This is why a comparison rate should be read beside the loan feature list, repayment typeHome Loans / Loan decisionsPrincipal and interest vs interest-onlyUnderstand repayment-type trade-offs before choosing an interest-only or principal-and-interest structure.Open page , rate type, fees, and lender policy. The number is helpful, but it is not the full decision.
For example, an offset accountHome Loans / Loan decisionsOffset vs redrawCompare how offset accounts and redraw may affect interest, access to cash, and loan structure decisions.Open page can change the practical value of a loan if the borrower keeps a meaningful average balance. A comparison rate alone usually cannot show that behavioural difference.
- Comparison rates may not reflect how you use offset.
- They do not show lender policy fit.
- They do not decide whether cashback changes the net outcome.
- They do not replace a document and serviceability review.
Use them as one input
A good comparison puts the comparison rate beside repayment estimates, fees, features and the reason for the loan. Together, those details show the overall position instead of only the smallest number.
For a purchase, the comparison may need to consider deposit, LVRHome Loans / Loan decisionsLVR and LMI explainedUse this when a guide mentions loan-to-value ratio, lenders mortgage insurance, or low-deposit trade-offs.Open page , settlement timing, pre-approvalHome Loans / Start hereHome loan pre-approvalReview what pre-approval can and cannot confirm before a buyer relies on it during inspections or offers.Open page , and documents. For a refinance, it may need to consider discharge feesRefinance / Before changingRefinance costsCheck discharge fees, new-loan costs, settlement adjustments, break costs, and the time needed to recover switching costs.Open page , break costs, package fees, valuation, cashback timing, and how long the borrower expects to keep the loan.
The comparison rate can help narrow the conversation, but a broker still needs to check whether the product can actually work for the borrower.
- Compare the repayment estimate.
- Add known upfront and ongoing fees.
- Check feature value against real use.
- Ask whether lender policy fits the borrower.
Broker note
Be careful with rate-only decisions
A rate-only decision can miss costs or restrictions that affect the borrower later. It can also miss situations where the cheaper-looking option is slower, less flexible, or not available for the borrower profile.
This matters for borrowers with variable income, self-employedHome Loans / Start hereSelf-employed borrowersPrepare income evidence, business documents, and broker questions before a lender assesses the file.Open page income, tight settlement dates, low deposits, unusual properties, fixed-rate break costsRefinance / Before changingRefinance costsCheck discharge fees, new-loan costs, settlement adjustments, break costs, and the time needed to recover switching costs.Open page , or plans to use equityRefinance / Review goalsUse equity carefullyCheck usable equity, borrowing capacity, purpose, risk, and lender policy before increasing debt.Open page later.
If the loan is for an existing borrower, the current loan should be reviewed first. Staying, repricing, refixing, restructuring, or refinancing can each have different costs and timing.
A comparison rate can also distract from timing. A product that looks cheaper may not help if the application cannot meet settlement, fixed-expiry, or document-readiness deadlines.
The safer comparison is to keep the rate in the same view as the goal, costs, features, documents, timing, and practical path to approval review.
- Do not compare rate without loan purpose.
- Check what fees are included and excluded.
- Ask if the lender policy fits the borrower type.
- Check timing before assuming a switch is practical.
Next step
Want a broker to check this against your situation?
Share the loan goal, timing and a few key details. An emoney broker can then pick up the enquiry with the relevant context.Compare loan optionsExample
Run the numbers with a calculator
Model how the interest rate, loan amount and term change repayments and total interest. This gives the comparison rate more context.
For refinance, a switching calculator or refinance savings estimate can help test the payback period after switching costsRefinance / Before changingRefinance costsCheck discharge fees, new-loan costs, settlement adjustments, break costs, and the time needed to recover switching costs.Open page . For buying, the repayment estimate should sit beside deposit, duty, upfront costsHome Loans / Loan decisionsDeposit and buying costsSeparate saved deposit, stamp duty, legal costs, lender fees, moving costs, and settlement cash.Open page , and cash buffer.
The calculator result is still an estimate. It does not decide lender approval, product availability, or whether a loan is suitable.
Run the same loan amount and loan term across each option first. If one option only looks better because the term is longer or the fees are excluded, the comparison is not clean.
- Compare repayment amount at the same loan term.
- Test total interest alongside the monthly repayment.
- Include switching or upfront costs where relevant.
- Ask what changes if the rate moves.
Broker note
Ask a broker to compare the real shortlist
Once the comparison is clear, the next step is to check the real shortlist against lender policy, documents, serviceability, features, fees, and timing.
A broker can explain the trade-offs across lenders on their panel. That still requires your actual circumstances, documents, goals, and property context. The comparison rate helps frame the question, but it should not carry the whole decision.
If you already have a loan, bring the current rate, comparison rate if available, fees, loan balance, repayment amount, remaining term, and any offset or redrawHome Loans / Loan decisionsOffset vs redrawCompare how offset accounts and redraw may affect interest, access to cash, and loan structure decisions.Open page details.
If you are buying, bring the deposit, property range, pre-approvalHome Loans / Start hereHome loan pre-approvalReview what pre-approval can and cannot confirm before a buyer relies on it during inspections or offers.Open page status, and buying-cost estimate. The same comparison-rate number can mean different things when the borrower context changes.
The final comparison should explain why an option is being shortlisted, what could make it unsuitable, and what still needs checking before the borrower acts.
- Which costs are included in the comparison rate?
- Which costs or benefits are not included?
- Does the product fit my loan purpose and documents?
- What would make a different option more practical?
Calculator next step
Home loan repayment calculator
Test whether a loan amount, rate, term, and repayment type feel workable before taking the numbers further.
- Best for
- Checking repayment comfort across purchase, refinance, or rate-change scenarios.
- What it calculates
- Weekly, fortnightly, or monthly repayments from loan amount, rate, term, frequency, and repayment type.
A broker still needs to check fees, comparison rates, offset or redraw settings, loan structure, and policy fit.
Open RepaymentsSources used
- ASIC MoneySmart choosing a home loan
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC MoneySmart mortgage calculator
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC MoneySmart using a mortgage broker
ASIC MoneySmartofficial sourceChecked 29 July 2026
- ASIC responsible lending obligations
ASICofficial sourceChecked 29 July 2026
This guide is general information and does not take into account your objectives, financial situation, or needs. A broker can review your circumstances before any recommendation.
Next step
Want a broker to check what applies to you?
Share the goal, timing and current loan context in Quick Check so the broker knows what needs reviewing.
Related guides
Keep moving through the decision.
Home loan review guide: check whether your loan still fits
A guide to reviewing your current home loan after rate changes, income changes, fixed-rate expiry, renovations, or new property goals.
Read guide
LVR and LMI explained
Understand loan-to-value ratio, lender's mortgage insurance, and why deposit size can affect cost and lender options.
Read guide
Offset vs redraw: what is the difference?
Compare offset accounts and redraw facilities before choosing a loan feature or reviewing your current setup.
Read guide