Glossary

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Comparison Rate

The comparison rate determines the true rate of a loan, taking into account the upfront costs, ongoing fees, and other fees not commonly included in advertised rates. Also called the Average Annual Percentage Rate (AAPR), it is designed to help borrowers compare loan offers on a more competent level by showing them the actual total costs. The comparison rate is calculated over a seven year period with a 75% loan value ratio (LVR). Australian lenders are required by law to advertise the comparison rate for all their personal and home loan ads.