Calculate all costs associated with a home loan, including account interest rates, upfront fees, and ongoing charges. Compare loans on an equal basis, and make informed decisions about which home loan best suits your needs.
What is a comparison rate calculator?
A comparison rate calculator is a financial tool designed to help borrowers understand the true cost of a loan, not just the advertised interest rate, typically for car loans, home loans or personal loans. While the nominal loan rate tells you the base cost of borrowing money, it often excludes fees and additional charges that can significantly affect your payments.
Our comparison rate calculator combines the interest rate, upfront fees, and ongoing costs to provide you with the comparison rate, which is a single percentage figure that reflects the total cost of the loan, the estimated monthly payment and the overall interest and fees payable over the life of the loan. This gives you a clearer picture of what you’ll actually pay and makes comparing loan products more straightforward.
How to use the comparison rate calculator?
Like any other home loan calculator, the comparison rate calculator is a simple, intuitive tool to use. You’ll just need to provide a few key details about your loan, beginning with the loan amount, your loan term, and the introductory rate, which is a special discounted rate offered by various lenders for an initial period. Here, the introductory rate may be fixed or variable.
Toward the end, you enter the reverted rate, ie the standard variable rate that applies once the introductory period ends. This is usually higher than the introductory rate. Last but not least, you need the upfront, one-off fees and the ongoing fees, basically regular charges throughout the loan’s term.
Once you enter these details, the calculator will display your comparison rate, the monthly repayment at both the introductory and reverted rates and the total interest and fees payable. The breakdown gives you a transparent overview of your total loan costs, helping you make confident, informed comparisons between lenders.
Why is a comparison rate calculator useful?
When searching for the right loan product, focusing only on the advertised interest rate can be misleading. Having a well-rounded view of all inclusions and their subsequent costs is necessary to make comparisons. A comparison rate calculator gives you a more accurate and consistent way to compare loan products by factoring in both the interest rate and associated fees. Without it, you may be drawn to a loan that looks cheaper upfront but costs much more over time due to the hidden and ongoing fees.
Using a comparison rate calculator ensures you understand the true cost of your loan, can compare multiple lenders on an even field, avoid being misled and choose a product that fits your goals. For further clarity or tailored advice, consider contacting a trusted mortgage broker.
