SHM April 19, 2002 – Home lenders touting rock-bottom honeymoon interest rate deals will be forced to provide
more information about the real cost of the loan after legislation changing credit regulations
was passed last night.
The alterations to the Uniform Consumer Credit Code – which regulates lending activities in
each state – will require banks and other lenders to publish an annualised average percentage.
rate (AAPR), or true rate, on all loan offers.
Andrew Willink, a spokesman for the financial services research group Cannex, said the true
rate did not take into account many significant loan features such as redraw facilities but did
provide consumers with a useful snapshot of the overall cost of a loan. “It can be confusing for
consumers to calculate the impact of up-front fees and ongoing charges,” he said.