Ratehacker: The Lowest Rates For October 2019

After the latest Reserve Bank cash rate cut, home loan rates are at their lowest on record. With banks cutting rates left right and centre, it can seem impossible to keep track of which bank has the lowest.

Wading through financial jargon and checking the fine print is annoying and time consuming. That’s why we’ve translated it into plain English for you.

Here are the lowest rates** on the market this month, without the nonsensical jargon to make things that much easier.

Get a home loan with the lowest rates

RateCity analysis shows that when it comes to passing on the rate cuts, non-bank lenders are giving the Big Four a run for their money.

If you’re buying a property to live in, rates are starting as low as 2.69%.

• Reduce Home Loans lead the way with its ‘Low Rider Home Loan’ for a 2.69% variable rate
• Well Home Loans has the ‘Well Balanced Home Loan’ available for a two-year fixed rate of 2.74%
• Homestar Finance offers the ‘Star Essentials Home Loan’ for a 2.74% variable rate (on loan amounts less than $850k, with a Loan to Value ratio of 80%)

For investors, rates are dropping as low as 2.99%.

• Reduce Home Loans is once again leading the way with its ‘Rate Slasher Investment Loan’ for a 2.99% variable rate (on loan amounts less than $850k, with a Loan to Value ratio of 80%)
• RACQ Bank comes a close second with its ‘Choices Fixed Investment Loan’ for a three-year fixed rate of 3.00% (available in Queensland only for principal and interest loans)
• Tic Toc is offering the ‘Fixed Investment Loan’ for a two-year fixed rate of 3.09% (on principal and interest loans)

Keep track of all the RBA rate changes with the RateCity Rate Tracker.

Travel overseas with no fees

If you’re travelling overseas, you’ll probably be interested to learn how you can save as much as you can on fees. Fortunately, you have options when it comes to banking without the added cost.

Here are three bank accounts with no foreign exchange fees:

• ING Everyday Account charges no monthly fees and will refund all foreign exchange charges, as long as you deposit over $1,000 month
• Citi Global Currency Account has no monthly fees, and no FX fees. With 10 different currencies available, you will only be charged the 2.50% fee if you withdraw money from an ATM where the currency withdrawn doesn’t match the currency of the account
• HSBC Everyday Global Account has no monthly fees or foreign exchange fees, however in the fine print it does state that ATM Operator Fees may be incurred at HSBC Group and non-HSBC ATMs

Grow your savings

Non-bank lenders are giving the big banks a run for their money, offering lower fees and higher savings rates, some as high as 2.5%.

In a time when savings rates are as low as 0.05%, these are the three highest savings rates on the market right now:

• Neobank 86 400 is offering the ‘Save account’ with 2.5% interest when you deposit at least $1000/month
• Up bank has its ‘Up Saver Account’ with 2.5% interest when you make five or more card purchases every month from your ‘Up Everyday Account’
• Bank of Queensland provides the ‘Fast Track Saver Account’ with 2.5% interest when you deposit at least $1000/month

Super is also having its day in the sun, with current figures showing funds returning over 8% above the current inflation rate, when the typical target is to beat inflation by 3.5%.

You have a few choices when it comes to improved super, with these three balanced super funds offering the highest five-year returns according to Superratings.

• AustralianSuper balanced fund has returned 9.23% in the past five years
• Hostplus balanced fund has returned 9.23% in the past five years
• Unisuper Accumulation 1 balanced fund has returned 8.94% in the past five years

Compare super funds now at RateCity.

Pay off your debts

Pushing debts out of your life can be made easier with a 0% balance transfer credit card. However, if you fail to repay the debt in full by the time your interest free balance transfer period is up, you will be hit with a much higher interest rate on the remaining balance.

Most banks limit this interest free period to six months, but we’ve found the three credit cards with the longest interest-free periods.

As long as you cut up the credit card or throw it in the freezer, you’ll get an interest free loan to get you out of debt.

• Citi Rewards Platinum Credit Card gives customers the longest interest free period with 26 months. However there is a 1.5% balance transfer fee, and when the 26 months is up it reverts to cash advance rate of 22.24% on the remaining balance.
• HSBC Low Interest Rate Credit Card offers 20 months interest free, there is no balance transfer fee, but after 20 months, you will be charged the variable cash advance rate – currently 21.99% – on the remaining balance.
• ANZ Platinum Credit Card offers 18 months interest free, charges a 2% balance transfer fee and when the 18 months is up reverts to 20.24% interest on the balance.

If you can’t trust yourself with a credit card, a personal loan to consolidate your debt (a debt consolidation personal loan) may be a better option.

These are currently the lowest rates, based on an unsecured loan of $10,000 repaid over three years. CUA is a higher rate as they are a credit union, whilst Ratesetter and Harmoney are peer to peer lenders.

• RateSetter sets the bar for the lowest rate with its ‘Unsecured Personal Loan’ on a three year term for 5.85%. However the comparison rate is 7.84% and you need an “excellent” credit rating (typically above 800). RateSetter may also charge a credit assistance fee, instead of an establishment fee, which starts at $299.
• Harmoney is offering an ‘Unsecured Personal Loan’ for a three year term starting at 6.99%, though the comparison rate is 7.69%. This is the rate offered to applicants with excellent credit, as Harmoney can increase its rate to a whopping 28.69% if you have a terrible credit rating. They also charge a $500 establishment fee.
• CUA has the next lowest rate with its ‘Unsecured Fixed Rate Personal Loan’ for a three year term starting at 9.89%, though the comparison rate is 10.14%. It provides the lowest establishment fee at just $175, as well as charging no monthly fees and providing unlimited free extra repayments.

Before you apply for a personal loan, make sure you check your credit score here.

** Data accurate as at Friday 4th October 2019 according to RC database and Superratings. The lowest rates on the market do not always equate to the cheapest products as fees and charges may apply. Contact the lender directly to request a copy of the Product Disclosure Statement, before you complete an applications, as applying to multiple credit products can negatively impact your credit score.