{"id":9015,"date":"2016-08-14T09:00:24","date_gmt":"2016-08-13T23:00:24","guid":{"rendered":"http:\/\/www.realestatetalk.com.au\/?p=9015"},"modified":"2016-08-14T09:00:24","modified_gmt":"2016-08-13T23:00:24","slug":"what-does-comparison-rate-mean-for-home-owners","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/what-does-comparison-rate-mean-for-home-owners\/","title":{"rendered":"What does comparison rate mean for home owners?"},"content":{"rendered":"

Whether you\u2019re a first-time home owner or a seasoned investor, we all want to find the best deal for our mortgage. With an abundance of lenders and loan types paired with the complicated jargon and hidden fees involved with financial services, it is difficult to find the loan that best suits you. When you\u2019re researching home loans, your understanding of what a \u2018comparison rate\u2019 is will be your greatest weapon.<\/p>\n

So what is a comparison rate?<\/h3>\n

\"Home
\nA comparison rate is a legal requirement from banks and lenders in Australia. It offers a single percentage value based on a combination of the interest rate and fees related to the loan. The lowest interest rate advertised by a lender is not necessarily the best for value which can often be misleading to consumers.<\/strong> This law was put in place because to help consumers steer clear of hidden costs. It helps you identify the true cost of a home loan and make an informed decision accordingly.<\/p>\n

How is it different to an interest rate?<\/h3>\n

It is near impossible to compare home loans that offer different interest rates<\/a> and fees. The interest rate is simply the percentage of your loan that you\u2019ll be paying on top of the principal amount. The comparison rate is different because it offers a more comprehensive reflection of overall costs of the loan \u2013 providing you with the bigger picture.
\nWhen you\u2019re comparing different loans, you should really be paying attention to the comparison rate rather than the interest rate. If you don\u2019t you could find yourself stung with a poor and more expensive mortgage decision.
\nTake the example below for instance:
\n\"Table-of-comparison-rates\"
\n 
\nIf we were to look at interest rates alone, Mortgage A would seem like the clear choice when in fact, you\u2019ll be paying less overall if you go with Mortgage B.<\/p>\n

What\u2019s included in the comparison rate?<\/h3>\n

The comparison rate offers the value for a number of costs associated with a home loan.
\nThese include:<\/p>\n