Two loan offers rarely line up on their own. One advertises a lower rate, the other waives a fee, and a third throws in an offset account. Comparing them by headline rate alone can hide several hundred dollars a year in fees or a feature you actually need.
This guide gives you a like-for-like method: one table, fixed inputs, and every cost and feature placed in the same row on both sides. Once the two loans sit in the same shape, the difference is usually much easier to read.
Start by fixing the inputs
A comparison is only fair if both loans are priced against the same scenario. Before you touch a rate, write down the same four numbers for each option:
- Loan amount (the figure you plan to borrow, not the lender's example)
- Loan term (e.g. 30 years, or whatever is left on your current loan)
- Repayment type (principal and interest, or interest-only)
- Rate type (fixed, variable, or a split of both)
Changing any one of these between columns breaks the comparison. A variable rate against a fixed rate is a different product, not a cheaper version of the same one. ASIC's Moneysmart explains the difference between fixed and variable home loan rates, and also covers interest-only home loans as a separate decision — both change what your repayments look like over time, so compare like with like.
The rows your table actually needs
Use one column per loan and one row per cost or feature. A printable version looks like this:
| Row | Loan A | Loan B |
|---|---|---|
| Interest rate (%) | ||
| Comparison rate (%) | ||
| Rate type (fixed / variable / split) | ||
| Fixed period end date | ||
| Application or establishment fee | ||
| Valuation fee | ||
| Ongoing fees (monthly or annual) | ||
| Discharge / exit fee | ||
| Other upfront costs (settlement, registration) | ||
| Offset account available? | ||
| Redraw available? | ||
| Extra repayments allowed? | ||
| Repayment frequency options | ||
| Loan term used in this comparison |
If an offer includes a cashback, a package fee, or a bundled product, add a row for it. Anything that costs money or changes your repayments belongs in the table, not in the margin.
Fill in the fees before you compare the rates
Rates get the attention; fees are where comparisons quietly drift. When you collect figures, ask each lender or broker for:
- Every fee charged to set the loan up
- Every fee charged while the loan is running
- Every fee charged when the loan ends or is refinanced
- Whether any fee is waived only for a limited period
Practical interpretation: a loan with a slightly higher rate and no ongoing fee can be cheaper over the life of the loan than a low-rate loan with a monthly charge, depending on your balance and how long you hold it. The table lets you see that; a headline rate does not.
Two rows deserve a note on what they mean:
- Comparison rate: a single figure that combines the interest rate with certain known fees, so loans can be compared on a common basis. It is a useful starting point, but it is built on standard assumptions and may not include every fee you will actually pay. Confirm what is included.
- Ongoing fees: the charge that repeats. Over a 30-year loan, a small monthly fee is paid hundreds of times, so it is usually the row people underestimate.
Read the rows, not the headline
Moneysmart notes that small differences in your mortgage interest rate can make a big difference to the long-term cost of your home loan. That is why the rate rows matter — but it is also why they need to be read next to the fee rows. A 0.10% difference and a $395 annual fee can point in opposite directions; the table puts both on the page so you are not weighing one and forgetting the other.
Once the numbers are in, work through three checks:
- Add the upfront cost of each loan. Establishment, valuation and settlement fees are paid once, but they are real money and they are paid early.
- Annualise the ongoing cost. Multiply monthly fees by 12 and add them to the annual interest estimate.
- Note what happens at the end of any fixed period. If a fixed loan reverts to a variable rate, you are comparing two rates, not one.
Features that change the maths
Some features are not fees but still affect what you pay. Moneysmart covers offset accounts and how they can reduce home loan interest, and interest-only loans as a separate choice. Record these in your table and ask how each one works in practice:
- Offset account: does it apply to the full balance or part of it? Is there a fee? Does the linked account have its own costs?
- Redraw: is there a minimum, a fee, or a limit on how often you can access extra repayments?
- Extra repayments: are they allowed without penalty on a fixed rate, and is there a cap per year?
- Splitting: can you fix part of the loan and leave the rest variable, and is there a cost to do so?
Practical interpretation: an offset account is only worth anything if you will actually keep money in it. If you will not, treat it as a neutral row and let the rate and fees decide.
Don't forget the cost of switching
Comparing a new loan against your current one is only half the job — you also need to compare against the cost of moving. Moneysmart's mortgage switching calculator is designed to help you see if switching home loans could be worthwhile for you. Use it with the fee figures already in your table so the exit costs on your existing loan are included.
Questions to verify with each lender or broker
Before you commit, put these to both sides and record the answers in your table:
- Is this rate the one I will actually receive after my deposit and loan size are assessed?
- Which fees in the comparison rate are included, and which are not?
- Are any fees waived, discounted, or time-limited?
- What will the rate be when any fixed, honeymoon or introductory period ends?
- What is the total cost to discharge or refinance this loan later?
Next steps
- Write down your four fixed inputs: amount, term, repayment type and rate type.
- Build the table above with one column per loan.
- Fill in the fee rows first, then the rate rows.
- Run Moneysmart's mortgage switching calculator if one of the loans is the one you already have.
- Take the completed table to a lender, broker or financial counsellor and confirm every row in writing before you apply.
If you want to see how loan options line up on the inputs that matter most, you can start with our home loan pages at /money/home-loans/, or use /match/ to describe what you are looking for and see the options that fit your scenario.
General information only
This article is general information about home loans in Australia. It is not legal, tax, credit or financial advice, and it does not take into account your objectives, financial situation or needs. Rates, fees and product features change and vary between lenders and between borrowers. Confirm every figure with the provider and read the product's terms before you decide. Australian Cash is a publisher of general information; it is not a lender, broker, government body or comparison service, and it does not arrange or approve loans.