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It is a requirement by law that all financial institutions advertise comparison rates when promoting their lending products, to allow people to make a more objective comparison with the lending products offered by other financial institutions.
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what is a comparison rate?
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A Comparison Rate is an all in one interest rate designed to help people identify the 'true' cost of the loan and is calculated by taking into consideration:
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- any discount or honeymoon rate
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- any discount or upfront fees, and;
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- any known ongoing (monthly) fees.
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An example of the comparison rate methodology for a Big Sky home loan follows.
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|  | Loan amount
Loan term
Annual interest rate
1 year honeymoon rate
Loan application fee
Monthly fee
3rd party legal costs
| Comparison rate
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| + $150,000
+ 25 years
+ 7.49% p.a.
+ 6.49% p.a.
+ $0
+ $0
+ $600
| = 7.52% p.a.
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The comparison rate is based on fortnightly repayment calculations. It does not include government fees as they are standard regardless of the lender.
Whilst a comparison rate may assist you in making more objective comparisons when evaluating competing loan products, it is important to recognise this limitation of comparison rates.
Many complimentary loan features that Big Sky offer including the ability to make additional and lump sum repayments without penalty, 100% mortgage offset facility, and free redraw of advance repayments are not taken into account in the comparison rate calculation. For this reason, when comparing lending products it is important to consider additional features which differentiate loan products as well as comparison rates.
You can find detail about all of Big Sky’s comparison rates by viewing our interest rates or by viewing our comparison rate schedules.
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Comparison rates are calculated for all loans with a fixed term, including home, investment, car and personal loans. Overdrafts and credit cards are classified as continuous lines of credit and therefore a comparison rate cannot be calculated.
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