Asset finance rates explained: why advertised rates mislead

If you’ve been shown a rate without being shown a total cost, you haven’t been shown the full picture.

This page explains why asset finance rates are often misleading — and how to compare finance properly.

“From X%” is not a price

Advertised rates are conditional. They assume:

• Ideal borrowers
• Short terms
• Clean assets
• Minimal fees

Most borrowers qualify for finance — not for the advertised rate.

Rate vs cost vs repayment

Three different things:

Card	Description
Rate	The interest percentage
Cost	Interest plus all fees
Total Cost	What it actually costs

Only one tells you what the finance actually costs.

Fees that change outcomes materially

Fees often sit outside the headline rate:

• ✗ Establishment fees
• ✗ Documentation fees
• ✗ Broker margin baked into pricing
• ✗ Early exit costs

They don’t look large individually. Over a full term, they add up.

How broker remuneration affects pricing

Broker commissions are recovered through pricing.

That means:

• Higher commission = higher margin required
• Margin is rarely itemised
• Two identical borrowers can receive different outcomes

Disclosure doesn’t always mean clarity.

Why comparison is harder than it should be

Callout (amber warning box): Finance becomes hard to compare when:

• Rates are negotiable
• Fees are fragmented
• Incentives are invisible

This complexity isn’t accidental — it’s structural.

What transparent pricing changes

Fixed pricing removes:

• ✓ Negotiation bias
• ✓ Commission-driven variability
• ✓ Rate ambiguity

For eligible borrowers, it produces cleaner, more predictable outcomes.