Australian credit law makes a comparison rate mandatory only when a credit advertisement states an annual percentage rate. It is optional otherwise, and it does not apply at all to credit cards or low cost credit contracts. Where it is required, the rate must be labelled as a comparison rate, be no less prominent than the interest rate or any repayment figure, and carry one of two warnings set out word for word in the Regulations.
A comparison rate is not required on every advertisement for a loan. It is required on any credit advertisement that states an interest rate, and the National Credit Code then governs its prominence, the words that go with it, and how long it survives a rate change.
Key Takeaways
- A comparison rate is mandatory only where a credit advertisement states an annual percentage rate. An advertisement that quotes no rate escapes the obligation entirely.
- Quoting one voluntarily pulls in the whole of Part 10 on the same terms.
- It must be identified as a comparison rate and be no less prominent than the advertised rate or any repayment figure, with separate rules for spoken and on-screen media.
- The accompanying warning is a prescribed form of words, in a long and a short version, and it is what discloses that redraw and early repayment fees sit outside the calculation.
- An advertisement keeps complying for seven days after a rate or fee changes.
- The same formula has a personalised counterpart: the Key Facts Sheet's comparison rate is worked on the consumer's own amount and term.
The trigger is the advertised rate, not the product
Part 10 states its own purpose: to "assist consumers to identify the true cost of credit offered by credit providers", by making disclosure mandatory "if an interest rate is advertised". Section 160(1) turns that into one sentence: "A credit advertisement must contain the relevant comparison rate in accordance with this Part if it contains an annual percentage rate." Subsection (2) makes it permissible "even if it does not contain an annual percentage rate".
The obligation attaches to the number, not the product, and a rate quoted voluntarily pulls in the whole Part on the same terms. Section 150(3) closes the loop from the other side: an advertisement "need not contain an annual percentage rate, but must do so if the advertisement states the amount of any repayment". Advertise a repayment and the rate follows; advertise the rate and the comparison rate follows.
A credit advertisement is broadly defined, as one "that states or implies that credit is available", but excludes notices required under the Code and "a publication that only lists reference rates". Two product categories are outside the Part altogether: section 158 excludes continuing credit contracts and low cost credit contracts, which is why a credit card advertisement carries no comparison rate, and buy-now-pay-later none.
What must go with the number, and how visible it has to be
A rate alone says nothing, so section 162(1) requires the advertisement to "clearly state the name of the consumer credit product, the amount of credit and the term to which each comparison rate applies". Section 161(3) allows more than one, so a product sold across a range of sizes can quote a figure for each relevant pair.
At two of those pairs the Regulations ask one thing more. Regulation 98 prescribes the $10,000 and $30,000 amounts for section 162(2), so an advertisement quoting a rate on either must say whether it "is for a secured loan if it has been calculated on the basis that a mortgage or guarantee is taken by the credit provider", or unsecured if not.
Section 164 is the anti-fine-print provision. A comparison rate "must be identified as a comparison rate", and "must not be less prominent than: (a) any annual percentage rate stated in the advertisement; and (b) the amount of any repayment stated in the advertisement". The second limb is the one that bites, catching the advertisement that leads on a repayment rather than a rate.
ASIC's Regulatory Guide 234, reissued in June 2026, treats a comparison rate as less prominent where a consumer must click through or move a cursor to see it, or where its position makes it "easy for a consumer to overlook".
Subsection 164(3) follows the form of the interest rate through electronic media: spoken and not on screen, and the comparison rate must be spoken too; displayed in text, and it must be displayed.
The warning is a prescribed form of words
Section 163(1) requires a warning "about the accuracy of the comparison rate that is prescribed by a regulation". Regulation 99 supplies two, given in the same form as the rate unless section 164(3) takes over.
The long statement, regulation 99(3):
"WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan."
The short statement, regulation 99(4):
"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."
Regulation 99(2) then permits the warning to "contain a statement that the credit provider does not provide credit for an amount, or a term, or both, specified in a credit advertisement", the example loans being legislated rather than chosen.
What can change without the advertisement breaking
Section 167 is the grace period: an advertisement "does not cease to comply with this Part merely because of a change in the annual percentage rate or in any credit fees or charges during the period of 7 days after the change takes effect". That is a window for withdrawing material already in circulation, not a licence to keep advertising a superseded rate.
Section 166(2) deals with costs nobody can know in advance: credit fees or charges "are not ascertainable and need not be included in the calculation if their imposition or amount is dependent on events that may or may not happen". A late payment fee may never be charged, so it stays outside.
Regulation 100 sets the precision: the rate "must be correct to at least the nearest one hundredth of 1% per annum", a floor not a convention, while 100(5) allows "reasonable approximations" where precision is "impractical or unreasonably onerous" and 100(6) imports the tolerances in sections 180 to 182.
Out of advertising, and into a personalised number
Section 165 extends Division 2 "with necessary changes" to any other document carrying a comparison rate.
The law also provides a version calculated on the borrower's own loan. Schedule 5 prescribes a Key Facts Sheet for standard home loans, one of whose fields is a personalised comparison rate. Note 6 specifies that it "must be calculated in accordance with the formula in subregulation 100(3) but using the designated amounts provided by the consumer under sections 133AC and 133AD of the Act": the same arithmetic, run on figures the consumer supplies rather than a legislated example.
Sections 133AC and 133AD make it obtainable: a lender whose website can be used to apply or enquire must let the consumer generate one, and a lender asked by any other route must provide one. The Schedule describes it as helping a borrower "understand what the total cost of your home loan might be, taking into account known fees and charges that will apply (other than government fees, charges or duties)".
Has anyone asked whether it works
Yes, and the answer was not flattering. A Final Impact Statement prepared in May 2008 for the Uniform Consumer Credit Code Management Committee found "an absence of evidence that the MCR regime is effective in improving consumer awareness and information", and concluded that the mandatory comparison rate "has failed to achieve the objectives expected of it". Against the statutory objective of identifying the true cost of credit: "this, the MCR fails to do and it should therefore sunset".
It did not sunset. The rules were carried into the National Credit Code in 2010. Treasury's 2010 impact statement on the Key Facts Sheet noted a related effect: the requirement "may have led to some lenders avoiding advertising interest rates to circumvent comparison rate requirements", which is the predictable response to a rule triggered by publishing one.
Where to look next
The comparison rate term page carries the definition and the designated example loans the figure is worked on. Published averages of advertised rates sit on the home loan rate pages, beside the cash rate. How much a lender will advance is a separate question: why a lender lends less than a calculator says.
Sources
- National Consumer Credit Protection Act 2009, Compilation No. 52, 1 July 2026 - National Credit Code sections 150, 157 to 167; Act sections 133AA to 133AD
- National Consumer Credit Protection Regulations 2010, Compilation No. 56, 1 November 2025 - regulations 98, 99, 100 and Schedule 5
- ASIC Regulatory Guide 234, Advertising financial products and services (including credit), June 2026 - RG 234.56 to RG 234.62
- Uniform Consumer Credit Code Management Committee, Mandatory Comparison Rates: Final Impact Statement, 7 May 2008 - section 10.2
- Treasury, Requiring a home loan 'key facts' document and standard terminology, December 2010 - regulation impact statement, paragraphs 13 and 14
General information about Australian credit disclosure law. Not financial advice, not credit assistance, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.
Common questions
Does every loan advertisement have to show a comparison rate?
No. Section 160 of the National Credit Code makes it mandatory only where the advertisement contains an annual percentage rate. An advertisement that names a product and mentions no rate at all triggers nothing. A lender may still include a comparison rate voluntarily, and the same rules on prominence and warnings then apply to it.
Why do credit cards not carry a comparison rate?
Because Part 10 of the Code does not reach them. Section 158 excludes continuing credit contracts, which is the category a credit card sits in, and also excludes low cost credit contracts. Credit cards have their own prescribed disclosure instead, in the Key Facts Sheet at Schedule 6 of the Regulations.
What exactly does the comparison rate warning have to say?
One of two statements set out word for word in regulation 99. The long statement says different amounts and terms produce different comparison rates and that redraw fees, early repayment fees and fee waivers sit outside the calculation. The short statement says the rate is true only for the examples given and may not include all fees and charges.
How long can an advertisement keep running after the rate changes?
Seven days. Section 167 says an advertisement does not cease to comply merely because of a change in the annual percentage rate or in any credit fees or charges during the seven days after the change takes effect. It is a grace period for withdrawing or reprinting material, not a licence to keep advertising a rate that has gone.
Is there a comparison rate calculated on my own loan amount?
For a standard home loan, yes. The Key Facts Sheet at Schedule 5 of the Regulations carries a personalised comparison rate, worked on the same formula but using the amount and term the consumer supplies rather than a designated example. A lender whose website can be used to apply or enquire must let a consumer generate one.