- Posted by: Nick Lucey
- Category: Finance & accounting, Financial Planning, Investments, loans, money, Mortgage Broking
MoneySmart defines a comparison rate as: ‘A rate that helps you work out the true cost of a loan. It includes the interest rate, and most fees and charges relating to a loan, reduced to a single percentage figure’. It can be difficult for consumers to compare home loans that have different interest rates and fees. Consequently, the National Credit Code (NCC) requires that credit providers must give a comparison rate when they advertise a rate or a weekly payment for home loans.
The comparison rate includes the interest rate or weekly repayment amount plus most fees and charges. For example, a bank might advertise its home loan interest rate as 5.5% p.a. However, when fees and charges are added, the real rate might be 6.75% p.a. They must also advertise this figure, which is known as the comparison rate.
If you would like to find out if your interest rate ACTUALLY stacks up, book an appointment with us today by clicking here.
I look forward to speaking soon
Nick Lucey BAppEc (financial planning)
Director | Financial Adviser
Nest Advisory Group