The Truth About Comparison Rates — and Why They Matter More Than You Think
You’ve seen the ads: “Our home loan rate is 5.89%*!” … then in smaller print: “Comparison rate 6.21%.”
So, what gives? What’s a comparison rate, and why should you actually pay more attention to that number?
If you’re searching for a home loan or a mortgage broker near you, understanding comparison rates could save you from choosing a deal that costs more in the long run.
🧾 What Is a Comparison Rate?
A comparison rate is the true cost of a home loan.
It combines:
The interest rate
Most upfront and ongoing fees (like annual fees, application fees, etc.)
It’s your apples-to-apples number to compare loans.
🔍 Why Just Looking at the Rate Can Be Misleading
Let’s say:
Loan A has 5.89% interest but $400/year in fees
Loan B has 6.09% interest but no fees
Loan A looks cheaper — but it might not be once the fees add up.
The comparison rate tells you which loan is actually more cost-effective.
💡 How Brokers Use Comparison Rates
At Nude, we:
Always consider both rate AND comparison rate
Use comparison rates to weed out “honeymoon” or gimmick loans
Show you the real numbers for your specific loan amount
👀 The Hidden Traps Comparison Rates Can Reveal
Low intro rates with high revert rates
Ongoing fees that chew away at your savings
Loans with limited features (no offset, redraw, etc.)
Even a difference of 0.10% in comparison rate can cost you thousands.
🧠 What to Focus On
Instead of asking “What’s the lowest rate?”, ask:
What’s the comparison rate?
What features am I getting?
What are the total costs over 3–5 years?
We answer all of this for you.
👥 Real Client Story: Priya in Sunshine
Priya nearly signed up for a 5.75% interest loan with $600 in hidden annual fees.
We found her:
A 5.89% loan
With a 6.01% comparison rate
No fees, full offset account, better flexibility
“Nude saved me from a dud deal I didn’t even realise was dodgy.”
✅ Want the Real Numbers Before You Commit?
We’ll show you the full picture — not just the promo headline.
