What Is a Comparison Rate (And Why Should You Care)?
If you’ve been Googling home loans, you’ve probably seen two different numbers:
A low advertised rate (like 5.59%)
A slightly higher comparison rate (like 6.07%)
So what gives? And which one should you care about?
Let’s clear it up.
🧠 What Is a Comparison Rate?
A comparison rate is the true cost of a home loan once you include:
The interest rate
Upfront fees (e.g. application, settlement)
Ongoing fees (e.g. account fees, package costs)
It’s designed to give you a more realistic picture of what you’ll actually pay.
🆚 Advertised Rate vs Comparison Rate
Type | What It Is |
|---|---|
Advertised Rate | Just the interest rate on the loan |
Comparison Rate | Interest + most fees, averaged over the loan |
The comparison rate is legally required to be shown — and it’s often higher.
Why? Because loans with low rates sometimes have sneaky fees tucked in.
💡 Real Example
Two lenders offer a $500,000 home loan:
Lender A: 5.59% rate, 6.07% comparison rate
Lender B: 5.79% rate, 5.81% comparison rate
At first glance, Lender A looks cheaper. But once you factor in:
A $395 annual fee
$600 application fee
...Lender B might actually cost you less over time.
😖 Why This Trips Up First Home Buyers
Because the lowest rate isn’t always the best deal.
Comparison sites love big rate headlines — but those rates:
May only apply to certain borrowers
Might come with fewer features
Could cost more in the long run
We help you compare the real cost, not just the shiny promo.
💬 How Nude Helps You See the Full Picture
We don’t just send you a list of rates. We:
Break down the comparison rate vs real-life repayments
Check what you qualify for (some lenders won’t even accept certain incomes or deposits)
Match you to a loan that fits your budget and goals — not just your inbox
🏡 Real Example: Ella & Marcus in Melbourne
They saw an amazing rate advertised — 5.49% — and were ready to apply. But the comparison rate was 6.28% (ouch).
We ran the real numbers and found them:
A slightly higher advertised rate
Lower comparison rate
Saved $2,100 over the first 3 years
“We didn’t even know what a comparison rate meant until Nude explained it. Game changer.”
✅ Let’s Compare the Real Costs for You
We’ll help you:
Understand the difference between rate types
Avoid loans that look good but cost more
Get a loan that actually works for your life
👉 [Book a free loan comparison session with Nude Home Loans]
No fluff. Just clarity.
