Loan True Cost Calculator
The advertised rate is not what you pay. See the real total cost of a mortgage or consumer loan: what you actually pay back, and how much of that is interest.
Built and checked byTimothy Hirou GaschereauFigures verified at the source on
Your details
The real cost of this loan, beyond what you borrowed
$580,691
Repayment per week
$692
Repayment per month
$2,998
Repayment per year
$35,973
This calculator assumes a fixed interest rate and standard monthly amortization for the full loan term. It does not account for offset accounts, redraw, extra repayments, refinancing, or changes in rate, and is not financial advice.
How to use this calculator
- 1. Switch between Mortgage and Consumer Loan to load typical starting figures for each.
- 2. Enter the amount you're borrowing, the interest rate, the loan term, and any upfront fees.
- 3. The calculator shows your monthly repayment, total amount repaid, and how much of that is pure interest, plus a year-by-year breakdown of principal versus interest.
What the rate doesn't tell you
The big number in the ad, 5.99% p.a., 6.14% p.a., whatever it is, is the interest rate. It's the number lenders lead with because it's the most flattering figure they can legally show you. It is not what you'll actually pay.
The true cost of a loan is every dollar that leaves your pocket over its life: interest, establishment fees, annual fees, monthly account-keeping fees, discharge fees, and anything else baked into the product. Every standard mortgage or personal loan also front-loads interest, the balance is highest on day one, so early repayments are mostly interest with only a sliver going to principal. That ratio slowly flips as the balance falls. A standard repayment figure is useful but it hides the cumulative interest paid over the full term, which is the number that actually matters when you're weighing a shorter term against a longer one.
This calculator closes that gap. Enter your own amount, rate, term and fees, and it shows the total amount repaid over the life of the loan, the real distance between what you borrowed and what you actually hand back.
What is a comparison rate, and why does it exist?
The comparison rate is a single annual percentage figure that combines a loan's interest rate with most of its fees and charges. ASIC's MoneySmart defines it as a rate that helps you work out the true cost of a loan, including the interest rate and most fees and charges, reduced to one percentage figure. It exists because lenders used to advertise eye-catching low rates while burying the fees in the fine print, so the comparison rate was mandated to force transparency.
The legal basis is Part 10 of the National Credit Code (Sections 160 to 164, Schedule 1 to the National Consumer Credit Protection Act 2009), in force since 1 July 2003. Section 160 says any ad showing an annual percentage rate must also show the comparison rate. Section 162 says the ad must state the product name, loan amount and term the comparison rate is based on. Section 163 requires a prescribed warning alongside it. Section 164 says the comparison rate must be displayed at least as prominently as the advertised rate.
The standardised basis for home loans is $150,000 over 25 years. That figure was set in 2003 and has never been updated, and as of 2026 six Australian capital cities have median house prices of $1 million or more. So the comparison rate's standard example is now wildly out of step with what most borrowers actually borrow, and your real number can look quite different once applied to your actual loan.
“WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.”
Prescribed short-form warning, Regulation 99, National Consumer Credit Protection Regulations 2010.
That warning is not boilerplate. It's telling you something real.
What's actually in the comparison rate, and what's not
The gap between the advertised rate and the comparison rate tells you a lot about a loan's fee structure.
Included
- Application or establishment fees
- Ongoing monthly account-keeping fees
- Annual package fees
- Settlement fees
- Discharge or exit fees, where known upfront
Excluded
- Government fees and charges (stamp duty, mortgage registration)
- Lenders Mortgage Insurance (LMI)
- Break fees on fixed-rate loans
- Redraw fees and late payment fees
- Offset account fees or conditional fee waivers
The comparison rate is a floor, not a ceiling. It captures the predictable, recurring costs of a loan, but the costs that really sting, like a fixed-rate break fee when you refinance or sell, are invisible in that number. ASIC is explicit that the comparison rate does not include all fees and charges. When you're comparing lenders, always ask what fees aren't in this figure.
Same rate, very different total cost: a worked example
Here's where it gets concrete. Two loans, same advertised rate, same amount, same term. Watch what happens once you look at the full picture.
| $500,000 over 30 years | Loan A, Budget | Loan B, No Frills |
|---|---|---|
| Advertised rate | 6.00% p.a. | 6.00% p.a. |
| Application fee | $0 | $600 |
| Monthly account fee | $0 | $10/month |
| Annual fee | $395/year | $0 |
| Discharge fee | $300 | $350 |
| Comparison rate (approx.) | ~6.08% p.a. | ~6.14% p.a. |
| Total fees over 30 years | $12,150 | $4,550 |
| Total interest paid | ~$579,190 | ~$579,190 |
| Total cost of loan | ~$591,340 | ~$583,740 |
Interest calculated on a standard principal and interest basis at 6.00% p.a. over 30 years. Comparison rates are approximations for illustrative purposes.
Loan B has the higher comparison rate, which correctly flags it as the fee-heavier product over the standard 25-year example. But look at the fee structure: Loan B front-loads costs with an application fee and adds a monthly fee, while Loan A charges an annual fee every single year. Over 30 years, Loan A actually racks up more in total fees, $12,150 versus $4,550, because that $395 annual fee compounds across three decades. The comparison rate flags the difference. Only the full calculation shows you the real dollar gap.
How loan term quietly inflates the interest you pay
This is the concept most borrowers underestimate. Same rate, same amount, but stretch the term and total interest paid can more than double. Take a $30,000 personal loan at 9.00% p.a.:
| Loan term | Monthly repayment | Total interest paid | Total amount repaid |
|---|---|---|---|
| 3 years | ~$954 | ~$4,344 | ~$34,344 |
| 5 years | ~$623 | ~$7,380 | ~$37,380 |
| 7 years | ~$481 | ~$10,404 | ~$40,404 |
The 7-year loan looks affordable at $481 a month. But you pay $10,404 in interest, more than double the 3-year loan's $4,344. That's $6,060 extra, just for the convenience of a lower monthly repayment. A lower monthly repayment does not mean a lower total cost. It almost always means the opposite, and that's exactly the trade-off this calculator is built to show side by side.
Six loan traps to watch for
1. Honeymoon or introductory rates
MoneySmart defines a honeymoon rate as an interest rate offered for a short time at the start of a loan, that eventually reverts to a standard rate. The trap isn't the low introductory rate, it's the revert rate. A loan advertised at 5.50% for the first 12 months might revert to 7.20% for the remaining 29 years. Always ask what the revert rate is, and model the full cost using that number, not the honeymoon one.
2. Low advertised rate, high fees
A loan with a 5.89% advertised rate and a 6.40% comparison rate has a 0.51% gap, that's a lot of fees hiding in there. A loan with a 5.99% rate and a 6.02% comparison rate has almost none. The size of the gap tells you how fee-heavy a product really is.
3. Balloon payments
Common on car loans and equipment finance. The monthly repayment looks manageable because a large lump sum, the balloon, is deferred to the end of the term. If you can't pay it or refinance it, you're in trouble, and the balloon isn't reflected in the comparison rate at all.
4. Break fees on fixed-rate loans
If you're on a fixed rate and you want to refinance, sell, or pay off the loan early, you may face a break fee running into the thousands, sometimes tens of thousands on large mortgages. They're explicitly excluded from the comparison rate, so ask for the break fee formula and a worst-case estimate before you sign.
5. Redraw fees and offset account conditions
Neither is captured in the comparison rate. A loan that looks cheap may charge a fee every time you access your own money through redraw, or attach an offset account to a minimum balance condition. Both affect the real cost of the loan even though neither shows up in the headline numbers.
6. Loan term extension traps
Refinancing to a lower rate can save money, but only if you don't reset the clock. Refinancing a 25-year-old mortgage into a new 30-year loan at a slightly lower rate often costs more in total interest than staying put. The lower repayment feels like a win. The extra years of interest are the loss. Always model the total cost, not just the monthly repayment.
How to read a Key Facts Sheet without getting played
Lenders must provide a Key Facts Sheet (KFS) for home loans under the National Consumer Credit Protection Act 2009, a standardised document that puts the key numbers in a consistent format so you can compare products side by side. Look for the comparison rate and the loan amount or term it's based on, the total amount payable over the life of the loan (the single most important number on the page), every fee listed individually, and the repayment amount and frequency.
A Product Disclosure Statement (PDS) goes further, with the full terms and conditions. It's longer, but check the fee schedule table specifically for anything not in the comparison rate: redraw fees, break fees, offset conditions.
- Compare comparison rates, but check the loan amounts and terms behind them actually match
- Calculate total interest over your real loan term, not the standard 25-year basis
- Ask for the total amount payable in writing
- Check the PDS fee schedule for anything excluded from the comparison rate
- On a fixed-rate loan, ask for the break fee formula and a worst-case estimate
- If there's a honeymoon rate, model the full cost using the revert rate
FAQ
What is a comparison rate in Australia?
A comparison rate is a single annual percentage figure that combines a loan's interest rate with most of its fees and charges. It's designed to give borrowers a more accurate picture of a loan's true cost than the headline interest rate alone. Under Part 10 of the National Credit Code, lenders must display a comparison rate whenever they advertise an annual percentage rate for consumer credit.
Is the comparison rate the same as the interest rate?
No. The interest rate is the percentage charged on your outstanding balance, it determines the interest component of each repayment. The comparison rate is the interest rate plus most fees and charges, expressed as a single annual figure, and it's almost always higher than the advertised rate. The gap between the two tells you how fee-heavy the loan is.
What fees are not included in the comparison rate?
Several significant costs are excluded: government fees and charges like stamp duty and mortgage registration, Lenders Mortgage Insurance (LMI), break fees on fixed-rate loans, redraw fees, late payment fees, and fees for optional features like offset accounts. ASIC is explicit that the comparison rate does not include all fees and charges.
How is the comparison rate calculated?
It's calculated using a prescribed formula set out in Section 100 of the National Consumer Credit Protection Regulations 2010. In simple terms, it converts all included upfront and ongoing fees into an annualised amount, adds that to the interest rate, and expresses the result as a single annual percentage. For home loan advertising, the standard basis is $150,000 over 25 years, though lenders can also show comparison rates based on other amounts.
Does the comparison rate apply to credit cards?
No. The comparison rate requirement applies to fixed-term consumer credit, home loans, personal loans and car loans, advertised for personal, domestic or household purposes. It doesn't apply to credit cards or other continuing credit facilities, and it doesn't apply to low-cost credit contracts including most buy now pay later products.
What is a honeymoon rate and how does it affect the true cost of my loan?
A honeymoon or introductory rate is an interest rate offered for a short time at the start of a loan that eventually reverts to a standard rate. The risk is the revert rate, the standard variable rate the loan switches to once the introductory period ends. If it's significantly higher, total cost can far exceed what the initial rate implied, so always model the full loan cost using the revert rate.
How do I calculate the total interest I'll pay on a loan?
The simplest way is to use a calculator like the one above. Manually, multiply your monthly repayment by the number of months in the loan term, then subtract the original principal. A $30,000 loan at 9% over 5 years has a monthly repayment of around $623, so over 60 months total repayments are $37,380, minus the $30,000 principal is $7,380 in interest.
What is the difference between a fixed and variable rate loan for total cost purposes?
A fixed rate locks in your interest rate for a set period, typically 1 to 5 years for home loans, giving you repayment certainty. A variable rate moves with the market and can go up or down. Fixed-rate loans often have higher comparison rates because the revert rate is factored in, and they carry break fees if you exit early, a real cost that's excluded from the comparison rate.
What should I look for in a loan's Key Facts Sheet?
Look for the comparison rate and the loan amount or term it's based on, the total amount payable over the life of the loan (the most important number), a full list of fees, and the repayment amount and frequency. Cross-reference it with the Product Disclosure Statement to find fees that may not appear in the comparison rate.
Can I use the comparison rate to compare a home loan with a personal loan?
Not directly. Comparison rates for different product types are calculated on different standardised bases: home loans use $150,000 over 25 years, personal loans typically use $10,000 over 3 years, and car loans often use $30,000 over 5 years. Comparing them directly is apples to oranges, so use a calculator with your actual loan amount and term instead.
Does the comparison rate always reflect my actual loan cost?
No. It's calculated on a standardised example loan, so if your loan amount or term is different from that standard, the comparison rate will diverge from your real cost. Use the total repayment figure from a calculator built around your own numbers instead.
Why do early repayments go mostly toward interest?
With standard amortising loans, interest is calculated on your remaining balance each month. Early on the balance is largest, so the interest portion of each payment is largest too. As the balance shrinks, more of each fixed repayment goes toward principal instead.
Does this calculator include offset accounts or extra repayments?
No. This calculator assumes a fixed rate and a standard repayment schedule for the full term. Offset accounts, redraw facilities and extra repayments can all reduce the real cost significantly, so treat the result as a baseline comparison, not your exact outcome.
Related reading
How to Refinance a Car Loan in Australia
Thinking of refinancing your car loan? Here is how to do it step by step, what it really costs, the balloon and car-age rules, and when it is actually worth it.
How to Refinance a Personal Loan in Australia
Want to refinance a personal loan in Australia? A plain-English guide to the process, the real costs, debt consolidation traps, and when switching actually saves money.
Offset Account vs Redraw: What Every Australian Homeowner Needs to Know
Offset account vs redraw: same interest saving, very different tax outcomes if your home becomes an investment property. The structural difference explained.
Where these numbers come from
Every rate and threshold in this calculator was read off the official page, not copied from another calculator. Check them yourself, they change.
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Disclaimer
The results provided by this calculator are estimates only, based on the assumptions you enter, and are not a prediction or financial advice. Actual loan costs depend on your lender's specific terms, fees and rate structure. Consider speaking with a licensed financial adviser or mortgage broker before making any borrowing decision.