Loan Comparison Calculator
Compare two loans side by side on your own loan amount and term. Enter each loan’s interest rate, upfront fee and ongoing fee, and see which one actually costs less in repayments, total interest and fees.
Want a more accurate result?
Calculator results are estimates only. A broker can run the same comparison on real quotes from the lenders on our panel, using your actual loan amount and term.
No fee from us for arranging your finance. No obligation. Takes 2 minutes
What this calculator compares
Two loans can have the same interest rate and still cost very different amounts. This calculator puts four inputs for each loan next to each other, so the difference shows up in dollars rather than in a percentage you have to interpret.
The interest rate
The rate charged on the balance. On a large loan held for many years, a small difference here moves the total more than anything else on the list.
Upfront fees
Application, establishment or settlement fees paid once at the start. They matter most on small loans and short terms, because there is less time and less balance to spread them over.
Ongoing fees
Monthly account fees or an annual package fee. Easy to overlook, because they are not part of the rate, but they are paid every year for as long as you hold the loan.
Your loan amount and term
The two numbers that decide how much the rate difference and the fees are each worth. Change either and the cheaper loan can change too.
Which loan is cheaper is a question about your own numbers, not about the advertised rate. That is the whole point of running the comparison yourself.
Why the comparison rate can point the wrong way
Every lender advertises a comparison rate next to the interest rate. It folds most fees into a single percentage, which is useful, and you can work one out for any single loan with our comparison rate calculator. The catch is that it is worked out on a standard example loan, not on yours.
The standard example behind every advertised comparison rate
Home loans: a $150,000 secured loan over 25 years
Personal and car loans are usually calculated on a smaller amount over a shorter term. Every comparison rate carries a warning that it is true only for the example given, and that different amounts, terms and fees give a different result.
Home loans: a $150,000 secured loan over 25 years
Personal and car loans are usually calculated on a smaller amount over a shorter term. Every comparison rate carries a warning that it is true only for the example given, and that different amounts, terms and fees give a different result.
Two things about that standard example are worth pausing on.
First, $150,000 over 25 years is a small loan by today’s standards. A fixed annual fee spread over $150,000 adds far more to the percentage than the same fee spread over $600,000. So a loan with a slightly lower rate and a package fee can look worse on its advertised comparison rate than it really is for a larger borrower.
Second, the comparison rate leaves out things that may or may not happen, such as break costs, redraw fees and discharge fees, and it also leaves out savings such as fee waivers. It is a starting point for comparing loans, not the finish line, which is why Moneysmart suggests comparing loans from at least two different lenders on your own numbers.
First, $150,000 over 25 years is a small loan by today’s standards. A fixed annual fee spread over $150,000 adds far more to the percentage than the same fee spread over $600,000. So a loan with a slightly lower rate and a package fee can look worse on its advertised comparison rate than it really is for a larger borrower.
Second, the comparison rate leaves out things that may or may not happen, such as break costs, redraw fees and discharge fees, and it also leaves out savings such as fee waivers. It is a starting point for comparing loans, not the finish line, which is why Moneysmart suggests comparing loans from at least two different lenders on your own numbers.
What your loan amount does to the answer
The five cards below use the same two illustrative loans throughout. Loan A has a lower assumed rate of 5.74 per cent, a $600 upfront fee and a $395 annual package fee. Loan B has an assumed 5.99 per cent and no fees. Both are 30 year principal and interest loans with monthly repayments. Only the loan amount changes.
$150,000 loan
Monthly repayment A $874 · B $898
Interest and fees, first 5 years
A $44,165 · B $43,466
Lower cost: Loan B, by $699
Over 30 years: Loan B, by $3,826
Interest and fees, first 5 years
A $44,165 · B $43,466
Lower cost: Loan B, by $699
Over 30 years: Loan B, by $3,826
$300,000 loan
Monthly repayment A $1,749 · B $1,797
Interest and fees, first 5 years
A $85,755 · B $86,932
Lower cost: Loan A, by $1,177
Over 30 years: Loan A, by $4,798
Interest and fees, first 5 years
A $85,755 · B $86,932
Lower cost: Loan A, by $1,177
Over 30 years: Loan A, by $4,798
$450,000 loan
Monthly repayment A $2,623 · B $2,695
Interest and fees, first 5 years
A $127,345 · B $130,398
Lower cost: Loan A, by $3,053
Over 30 years: Loan A, by $13,421
Interest and fees, first 5 years
A $127,345 · B $130,398
Lower cost: Loan A, by $3,053
Over 30 years: Loan A, by $13,421
$600,000 loan
Monthly repayment A $3,498 · B $3,593
Interest and fees, first 5 years
A $168,934 · B $173,864
Lower cost: Loan A, by $4,929
Over 30 years: Loan A, by $22,045
Interest and fees, first 5 years
A $168,934 · B $173,864
Lower cost: Loan A, by $4,929
Over 30 years: Loan A, by $22,045
$750,000 loan
Monthly repayment A $4,372 · B $4,492
Interest and fees, first 5 years
A $210,524 · B $217,330
Lower cost: Loan A, by $6,806
Over 30 years: Loan A, by $30,669
Interest and fees, first 5 years
A $210,524 · B $217,330
Lower cost: Loan A, by $6,806
Over 30 years: Loan A, by $30,669
Read the first card against the rest. At $150,000, the fee-free loan wins. From about $210,000 upward, the loan with fees wins, and the gap keeps widening as the loan grows. The advertised comparison rate is calculated at the $150,000 end of that range, so it points to Loan B even for borrowers where Loan A costs less.
Worked example: two loans, one $600,000 borrower
The figures below are illustrative and are not a rate offer, a quote, or a prediction. They show how the arithmetic behaves.
Borrowing $600,000 over 30 years, principal and interest, monthly repayments.
Loan A: assumed 5.74 per cent, $600 upfront fee, $395 a year package fee.
Advertised comparison rate on the $150,000 example, about 6.14 per cent.
Monthly repayment $3,497.63, plus about $32.92 a month of package fee.
Loan B: assumed 5.99 per cent, no fees.
Advertised comparison rate, 5.99 per cent.
Monthly repayment $3,593.45.
On the advertised figures, Loan B looks cheaper. On this borrower’s numbers, Loan A costs about $62.90 a month less even after the fee, $4,929 less in interest and fees over the first five years, and $22,045 less over 30 years. Its comparison rate recalculated on $600,000 over 30 years is about 5.84 per cent, below Loan B’s.
Borrowing $600,000 over 30 years, principal and interest, monthly repayments.
Loan A: assumed 5.74 per cent, $600 upfront fee, $395 a year package fee.
Advertised comparison rate on the $150,000 example, about 6.14 per cent.
Monthly repayment $3,497.63, plus about $32.92 a month of package fee.
Loan B: assumed 5.99 per cent, no fees.
Advertised comparison rate, 5.99 per cent.
Monthly repayment $3,593.45.
On the advertised figures, Loan B looks cheaper. On this borrower’s numbers, Loan A costs about $62.90 a month less even after the fee, $4,929 less in interest and fees over the first five years, and $22,045 less over 30 years. Its comparison rate recalculated on $600,000 over 30 years is about 5.84 per cent, below Loan B’s.
This is why a comparison run on your own numbers can reverse the answer the advertised figures suggest. The fee is real, but on a larger loan it is outweighed by the rate difference, and it keeps being outweighed every year the loan runs. If you already have a loan, the same test tells you whether refinancing your home loan is worth the switching costs.
What the calculator does not show you
A cost comparison is one part of choosing a loan. These are the others, and every one of them can change which loan suits you.
Features that save money
An offset account can reduce the interest you pay by more than a small rate difference would. A loan without one may cost more in practice even if it looks cheaper in the comparison. The home loan offset calculator shows what an offset balance is worth.
Rates that do not stay put
Variable rates move, and introductory rates revert to a higher rate after a set period. Compare the rate that will apply after any discount period ends, not just the opening one. The introductory rate loan calculator models the revert.
The cost of leaving
Break costs on fixed loans and discharge fees are not in the comparison rate. If you may sell or refinance within a few years, ask what leaving would cost before choosing, and run the numbers in the mortgage refinance calculator.
Cashback and fee waivers
One-off cashback offers and waived fees are also outside the comparison rate. Count them, but compare them against the rate difference over the years you expect to keep the loan.
Before you compare quotes
For home loans there is a better tool than any advertised figure. Under the National Consumer Credit Protection Act, a lender must give you a Key Facts Sheet for a standard home loan when you ask for one. It shows a personalised comparison rate for the loan amount and term you give it, plus the total you would repay and every establishment and ongoing fee. Ask each lender for one on the same amount and term, and you have a like-for-like comparison. If you would rather not collect them yourself, a free loan consultation covers the lenders on our panel in one conversation.
Related tools on this site: loan repayment calculator, extra repayment calculator and borrowing power calculator. Buying rather than switching? Start with buying a home, or home loans in Adelaide if you are buying in South Australia.
Sources
Australian Government, ASIC Moneysmart: Comparison rate and Choosing a home loan.
Commonwealth Bank: Comparison rate warning, an example of the standard $150,000 over 25 years warning every lender publishes.
Fitzroy Legal Service, The Law Handbook: Disclosure before entering a contract, on Key Facts Sheets under s 133AD of the National Consumer Credit Protection Act 2009.
Government of South Australia, HomeSeeker SA: Comparison rate.
About the figures on this page. Every repayment, interest and fee figure was calculated directly from the standard amortisation formula using the two illustrative loans described above. The rates and fees are assumptions for illustration and are not an offer, a quote or a forecast.
Important information about this calculator. This calculator compares the cost of two loans from the rates, fees, amount and term you enter. It assumes both rates stay the same for the whole period and repayments are made on time, and it does not include government charges, lenders mortgage insurance, break costs, discharge fees or the value of features such as an offset account. Results are estimates only. They are not a quote, an offer of credit or a recommendation, and approval of any loan is subject to the lender’s criteria.
General information only. Nothing on this page takes your objectives, financial situation or needs into account. Loanity is a credit representative and can provide credit assistance once we understand your circumstances.
Australian Government, ASIC Moneysmart: Comparison rate and Choosing a home loan.
Commonwealth Bank: Comparison rate warning, an example of the standard $150,000 over 25 years warning every lender publishes.
Fitzroy Legal Service, The Law Handbook: Disclosure before entering a contract, on Key Facts Sheets under s 133AD of the National Consumer Credit Protection Act 2009.
Government of South Australia, HomeSeeker SA: Comparison rate.
About the figures on this page. Every repayment, interest and fee figure was calculated directly from the standard amortisation formula using the two illustrative loans described above. The rates and fees are assumptions for illustration and are not an offer, a quote or a forecast.
Important information about this calculator. This calculator compares the cost of two loans from the rates, fees, amount and term you enter. It assumes both rates stay the same for the whole period and repayments are made on time, and it does not include government charges, lenders mortgage insurance, break costs, discharge fees or the value of features such as an offset account. Results are estimates only. They are not a quote, an offer of credit or a recommendation, and approval of any loan is subject to the lender’s criteria.
General information only. Nothing on this page takes your objectives, financial situation or needs into account. Loanity is a credit representative and can provide credit assistance once we understand your circumstances.
STILL GOT QUESTIONS?
Loan comparison questions, answered
How do I compare two loans properly?
Use the same loan amount and term for both, then add up the repayments and every fee over the time you expect to keep the loan. The loan with the lower total is cheaper for you, whatever the advertised rates say. The calculator above does that arithmetic side by side.
What is the difference between this and a comparison rate calculator?
A comparison rate calculator turns one loan’s rate and fees into a single percentage. This calculator compares two loans against each other in dollars, on your own loan amount and term. Use the comparison rate to shortlist, then this to decide.
Why is the comparison rate based on $150,000?
It is the standard example lenders are required to use for home loans, a $150,000 secured loan over 25 years. Using one example means every advertised figure is calculated the same way, but it also means the figure is only exact for a loan of that size and term.
Is the loan with the lowest comparison rate always cheaper?
No. Fixed fees weigh more heavily on a small loan than on a large one. In the example on this page, the loan with fees has the higher advertised comparison rate but costs less for any borrower above about $210,000.
What is a Key Facts Sheet?
A one-page summary a lender must provide for a standard home loan when you ask. It shows your loan amount and term, the interest rate, a personalised comparison rate, the fees and the total amount you would repay. It is the closest thing to a like-for-like comparison between lenders.
Should I include fees when comparing loans?
Yes. Upfront fees, monthly fees and annual package fees are all part of what a loan costs. Leave them out and you are only comparing rates, which is how a loan that costs more can end up looking cheaper.
How much does a small rate difference really save?
It depends on the balance and how long it runs. In the $600,000 example on this page, a quarter of a percentage point is worth about $95 a month in repayments before fees, and about $22,000 over 30 years after fees.
Does it matter how long I keep the loan?
Yes. Upfront fees are spread over the years you hold the loan, so they cost more per year if you refinance or sell early. Compare the total over the period you actually expect to keep it, not only over the full term.
Can I compare a fixed loan with a variable loan here?
You can compare the figures, but the result assumes both rates stay the same for the whole period. A fixed rate ends after its fixed term and a variable rate can move at any time, so treat a fixed-versus-variable comparison as a snapshot, not a forecast.
Do you charge a fee to help me compare loans?
We do not charge you a fee for arranging your finance. Brokers are generally paid a commission by the lender when a loan settles. If any fee from us would ever apply to your situation, you would be told in writing before you proceeded.