Comparison Rate Calculator
Did you know that a comparison rate can help you make the right home loan decision? You can fight the hidden costs and higher interest rates that are lurking behind an attractive home loan deal.
Typically, a lender may entice you with a great introductory home loan interest rate. But, is the interest rate after the introductory offer a great deal?
Or, will you pay a high amount of interest over time? This great introductory interest rate may also require payment of a fee, so is this home loan deal as good as it looks?
Using a comparison rate will compare the introductory interest rate along with the continuing interest rate and the necessary fees. It will calculate whether the home loan is offering a good deal for you across the loan duration.
The comparison rate is given as a percentage and can be used to compare any home loan. A great comparison rate is below 3% so aim to achieve this when searching Odin Mortgage’s comparative interest rates.
When using our expert Expat brokerage, we can negotiate with a lender on your behalf to ensure the deal you get really is as good as it looks!
Use Odin Mortgage’s Comparison Rate Calculator to find out comparison rates for your home loan offers!
What Do Comparison Rates Include?
Comparison rates include the interest rate of the home loan as well as the fees that apply.
Comparison rates are given as a percentage figure and help homebuyers gain an accurate perception of the home loan presented to them.
Why Are Comparison Rates Important?
Comparison rates are important as they provide homebuyers with a realistic interpretation of different home loan options.
Many home loans offer a great introductory interest rate as an incentive. However, you may then uncover hidden fees and see the interest rate revert to a less than favourable figure!
However, once you had agreed to the home loan, you were trapped. You had to pay the terms of the home loan until the current deal had expired.
When using comparison rates, you can make a better decision about your home loan!
Can I Compare Home Loans Using Comparison Rates?
You can compare the percentage comparative rates of various home loans to choose the best home loan for you! All Australian home loan lenders must provide access to their comparison rate so homebuyers receive full transparency.
You can compare home loans using comparative rates to assess which home loan is more affordable for you!
Although, standard comparative rates provided by lenders may be unhelpful in offering a valid comparison. Use Odin Mortgage’s Comparison Rate Calculator to discover a custom comparative rate calculation for you!
Odin Mortgage is a service that is free for you to use! We secure our fee from the lender you choose to accept. Read our FAQs to discover more about Odin Mortgage!
Is the Comparison Rate the Same as the Interest Rate?
The comparison rate is made up of the interest rate and any fees. Therefore, the comparison rate is not the same as the interest rate.
When searching for a home loan, you may focus on the interest rate. The interest rate is important as the higher the interest charged, the higher your monthly repayments will be.
However, have you read the small print? How long will the interest rate last? Many home loans will offer introductory interest rates, reverting to a much higher rate after a short period.
This incentive attracts homebuyers with a low rate, although you could end up paying more than you assumed eventually.
Additionally, many home loans will require upfront fees and ongoing fees. Is a home loan with so many fees attached really an attractive proposition?
The comparative rate takes these factors into account and compares all aspects of a home loan. You may find that a home loan with zero fees and a higher interest rate actually works out cheaper over the long run!
Some home loan deals that mesmerise you with low introductory rates and hidden fees may cost a higher price.
What Is the Difference Between Interest Rate and Comparison Rate?
Your interest rate is the amount of interest charged to your home loan by your lender. You may agree to a fixed interest rate or a variable interest rate, or adopt a modern split interest rate approach.
Fixed Interest Rate
If you agree to a home loan with a fixed interest rate, you will be certain how much your monthly repayments will cost. You can agree to fix the interest for up to 5 years, although an interest rate of around 4% or 5% is typical.
However, if you are tied to a fixed interest rate, you cannot switch to a better deal during the payment period. Also, you cannot sell your home. You will need to pay an exit fee or a break cost to release you from the home loan deal. This is usually a few thousand dollars.
Variable Interest Rate
A variable interest rate may change over time in line with the RBA, as seen with the RBA’s recent cash rate hike. The amount you pay each month will fluctuate and will rise and fall in line with such factors.
However, you will be able to secure a lower variable interest rate, usually between 2% to 3%. You are free to sell your home or switch to another deal, however, and there will be no exit fees charged.
This is a great choice for homebuyers who understand applicable interest rates and forecasts as you can switch to a new deal regularly!
Split Interest Rate
A split-interest rate is the best of both worlds! You can assign a portion of your home loan to a fixed interest rate deal, and the remaining portion will adopt a variable interest rate.
Using a split rate deal, you will possess some security knowing that some of your home loan repayment will not rise. Yet, you can also enjoy the flexibility and lower costs of variable interest rates.
What Is a Good Comparative Rate for an Australian Home Loan?
A great comparative rate for your home loan is below 3%. If you can find a home loan with a comparative rate of 3% or even lower, you can rest assured that you are getting a great deal!
Remember that a home loan could have an interest rate of 4% for example, and achieve a comparative rate of 3%. This is because, over the home loan duration, there are fewer hidden fees and a stable interest rate.
Oppositely, you may have spotted a home loan that looked amazing on the surface, with a perfect 12-month introductory rate. However, with a higher reverted interest rate and high hidden fees, this home loan could achieve a poor comparative rate of 5%.
How Do You Calculate Comparison Rate?
Calculate your comparison rate using Odin Mortgage’s Comparison rate calculator! You will gain a tailored result that meets your needs more than the lender comparative rates.
Enter your loan amount and loan term into the calculator. Next, enter the introductory interest rate and the reverted interest rate. This is the interest rate that you will need to pay after the introductory interest rate has expired.
Continue by entering ongoing fees and upfront fees, along with end fees. You will receive a comparison rate for your home loan, given as a percentage. You will also see the repayment rates for each interest rate, along with the total interest and total fees payable.
When using our Comparison Rate Calculator, you can compare multiple home loans and secure the best deal for your Australian property purchase!
Request a Call Back From Odin Mortgage!
Are you searching for a great Australian home loan as an Expat, or foreign national? Odin Mortgage is a leader in mortgage brokerage for Aussie Expats and will work to get your home loan pre-approved!
We can also help you to refinance an existing home loan and secure a lower rate, saving you money! As Australian Credit Licence holders, Odin Mortgage is a name you can trust! Contact us today and request a call back from our expert brokers!
Frequently Asked Questions
Can I ask a credit provider for their home loan comparative rate?
Yes, credit providers will provide you with their home loan comparison rate although only a few important details may be included.
Additionally, their comparison rate may not include certain fees applicable to your personal loan amounts.
Find out the true cost of your home loan by using Odin Mortgage’s Comparison Rate Calculator. You will distinguish between the total cost of the home loan against an advertised interest rate and certain fees.
Should I search for a comparative rate for a variable home loan or a fixed rate home loan?
You can search for any comparison rate calculated using our specialist calculator! Fees and charges may apply to all home loans.
However, a fixed rate loan is difficult to leave once you have agreed to the terms and the ongoing interest rate. You will need to pay exit fees if you want to switch deals, costing you several thousand dollars for the privilege.
Variable rate loans are flexible and so you can switch to another deal easily if you find that the current home loan deal is not working for you.
Will a lender offer incentives to agree to their home loan deal terms?
Lenders want your business! They will consistently try to attract more borrowers and enhance their portfolios. Typically, an introductory interest rate may be offered as an incentive.
However, there may be charges attached and establishment fees included. You could discover that the introductory interest only lasts a few months and then you are stuck with a much higher rate.
Look for practical incentives from lenders such as a redraw facility or offset account. A redraw facility allows you to overpay on your repayments and then withdraw the money again and use it as you wish. This incentive offers benefits to the interest you pay.
Likewise, an offset account help to lower the interest that you pay over the long term. Your cash in a transaction or savings account offsets your home balance and reduces the interest payable. You can still access this cash but you receive a benefit of lower interest overall!