what is a comparison rate?

From July 1 2003, all credit providers are required by law to use the Comparison Rate when advertising interest rates for consumer credit loans, such as home loans and personal loans.

The Comparison Rate is a tool to help you identify the true cost of a loan and to compare different loans. Comparison Rates are calculated in accordance with a standard formula, which takes into account the interest rate plus certain fees and charges such as upfront and ongoing fees.

As a low fees lender Maxis Loans welcomes this new legislation. Customers can now see at a glance how expensive some of the "honeymoon" and "special" offers from other lenders can actually be over the term of the loan once fees and charges are included.

home loans

The advertised Comparison Rates for our home loans are calculated based on a loan of $150,000 over a 25 year term with monthly repayments.

This Comparison Rate Schedule* (19Kb, PDF) includes comparison rates for other loan scenarios.

frequently asked questions about comparison rates

I already have a loan with Maxis Loans so how does the comparison rate affect me?

Your loan works in exactly the same way as previously. Interest is still charged at the rate shown in the table. The comparison rate has merely been developed to enable you to see at a glance how much your loan is costing once the effect of fees and charges are taken into account.

which rate am I actually charged?

You continue to be charged interest at the nominal rate. The Comparison Rate is included for comparison purposes only - to enable you to judge one loan against another.

how is the comparison rate calculated?

The Comparison Rate is calculated in accordance with a standard formula, which takes into account the interest rate plus fees and charges such as upfront and ongoing fees. It does not include:

• government charges (eg stamp duty or mortgage registration fees) as these charges will be the same regardless of which financier or loan product the customer chooses;
• fees and charges which cannot be ascertained at the time that the Comparison Rate is calculated; and
• fees and charges which may or may not be charged, because they depend on some event which may or may not occur (for example, fees for early termination).

The law says that the advertised Comparison Rate must be calculated for the amount and term that is the typical amount of credit provided by the credit provider for that product.

The advertised Comparison Rates for our home loans are calculated based on a loan of $150,000 over a 25 year term with monthly repayments.

The Comparison Rate Schedule* (19Kb, PDF) gives Comparison Rates for a wider range of amounts and terms.

which products are affected?

• Rate Saver Home Loan
• Money Manager Offset Account

*The Comparison Rate Schedule is in Portable Document Format (PDF). PDF is a document-viewing format supported by all major platforms. If you have Adobe Acrobat Reader or a similar PDF-reading application installed on your computer, you can download and view the Schedule and any other PDF document from this website.

If you do not have a PDF-reader installed on your computer, you can obtain one by downloading Acrobat Reader from the Adobe website (free download).