Comparison Rates - What Are They?

When presenting an offer for a mortgage or other credit it is necessary for Banks and other credit providers to show a comparison rate along with the interest rate so consumers know what they are really paying.

A comparison rate is to show the client how the loan compares to others on the market taking into account all fees, interest rate amount and term. It must be remembered that the comparison rate will change as the term of the loan changes.

The interest rate is not the only cost to a loan; other contributing factors are fees and other charges which may change over the term of the loan.

Following is a link to the Consumer affairs Victoria website for further information.

Comparison Rates Decoded