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Interest rates - Dummies definition

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T

tronic72

Joined
26 October 2007
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Hi,

At the risk of looking foolish. Can someone please explain the difference betweem the "official cash rate" which is 4.5%

And what the rest of us are paying.

I've just done quick search and the big banks are currently:
ANZ - 7.74% (Comparision rate 7.84%)
NBA - 7.53% (Comparision rate 7.58%)
WBA - 7.71% (Comparision rate 7.92%)

We are currently locked in for another 2 years at 7.79%.

Thanks, T
 
the official cash rate is the rate the reserve bank sets to reflect inflation.

regular banks set their interest rates around this value.
when the cash rate changes banks will adjust soon after
 
I would not be worried about rate when you house price is declining. Sell and start again later.
 
I have a dumb question to add.

Having never bought a house I would like to know what a 'comparison rate' is?
 
sam76 said:
Having never bought a house I would like to know what a 'comparison rate' is?
Click to expand...

All lenders must disclose a benchmark comparison rate in their advertising of home loans and personal loans since July 2003. The comparison rate is designed to reflect the total annual cost to a borrower of a loan. It wraps up interest payments and fees and expresses all these costs in one rate.
 
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