Glossary · Financial Portfolio

What is a comparison rate?

A comparison rate combines a loan’s interest rate and certain fees into one annual percentage using specified assumptions. It helps explain more of the cost than the interest rate alone.

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Plain English. Australian context.

Comparison rate

Know what the term means, what it does not mean and where to go next.

Meaning & context

What it means for your records.

Plain-English information to help you organise your financial picture.

Financial Portfolio editorial team
Australian record-keeping context
Updated 7 October 2026

A simple example

One hypothetical loan could advertise 6% interest with a 6.4% comparison rate. The difference signals that included fees affect its cost. It does not mean interest is charged to your balance at 6.4%.

What to keep in your records

Keep the interest rate and comparison rate in separate fields, alongside the assumed loan amount, term and quoted date. Save the Key Facts Sheet or offer used for the comparison.

A common mix-up

The comparison rate is not a personalised total cost or a summary of every feature. Different loan amounts, terms and excluded charges can change the result. Read ASIC Moneysmart’s explanation.

Should I compare an interest rate with a comparison rate?

Compare like with like: interest rates with interest rates and comparison rates with comparison rates using matching assumptions. Also read the fees and conditions.

Where can I check the meaning of comparison rate?

Use the ASIC Moneysmart source alongside the relevant statement or product documents. The examples here explain the term; they do not recommend a financial product.

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