How to Get Australia’s Best Interest Rates on Offer Right Now

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We’ve made it to September, and it’s not just the weather that is heating up.

We’ve entered the spring home buying season in a period of greater affordability for would-be buyers, and the home loan rate war is only getting started.

This is a valuable time for young Australians who have felt priced out of the property market in major capital cities like Sydney and Melbourne. Decreasing house prices mean that owner-occupiers and budding property investors may finally have the chance to snatch up a home in their budget.

We also have a new lowest variable home loan rate in Australia currently sitting below 2 per cent for owner-occupiers. This is a rate that homeowners would only have dreamed of just a few years ago.

Meanwhile, new car sales have been steadily decreasing. For buyers still keen to get their hands on a new set of wheels, this means that the bargaining power may finally be in their hands – and not the dealer’s.

But none of this is achievable without a competitive savings account to help you grow your nest egg. This month, we explore the savings accounts still offering you better returns than some big banks.

If you’re looking to spring forward with your finances, here are some of the most competitive interest rates on the market for home loans, car loans and savings accounts.

Lowest owner-occupied home loan rates

The Reserve Bank of Australia (RBA) has held the cash rate at 0.25 again this month, however interest rates are still moving out of cycle.

This week we saw a new lowest variable home loan rate hit the market at 1.90 per cent from Reduce Home Loans.

It is a one-year offer, reverting to 2.39 per cent after this period. Borrowers with LVRs of at least 80 are eligible, with a maximum loan amount of $850,000.

This new rock-bottom rate may indicate that more home loan lenders will follow, plunging more and more mortgage rates below 2 per cent.

Lowest variable, owner-occupier rates paying principal and interest

Home loan Introductory rate Introductory term Ongoing rate Comparison rate
Reduce Home Loans Rate Crusher 1 Year Intro

1.90%

12 months

2.39%

2.39%

Easy Street Financial Services Standard Variable Home Loan

1.95%

1.99%

Loans.com.au Smart Booster Home Loan Discounted Variable

1.99%

12 months

2.48%

2.47%

Freedom Lend Freedom Variable Home Loan

2.17%

2.17%

Homestar Finance Star Essentials Home Loan

2.19%

2.22%

Source: RateCity.com.au. Data accurate as of 02.09.2020.

Lowest investor rates

The latest CoreLogic figures show that housing values fell for the fourth consecutive month, edging down 0.4 per cent in August.

The Melbourne property market fell the furthest in August, with prices decreasing by 1.2 per cent. Sydney also fell by 0.5 per cent, and Brisbane was down by 0.1 per cent.

While existing property owners may be lamenting this loss, it’s not all doom and gloom. This is positive news for young Australians who’ve not yet been able to afford a foot on the property ladder.

Whether you’re looking for a place to live in or wanting to dabble in the world of property investment, decreasing housing values means greater accessibility for would-be buyers. And with interest rates never having been lower, the potential loan repayments are more affordable.

Lowest variable investor home loans paying principal and interest

Home loan Ongoing rate Comparison rate
Homestar Finance Variable Rate Investment Loan

2.49%

2.52%

Homeloans.com.au Low Rate Home Loan – Prime

2.59%

2.61%

Credit Union SA Discounted Special Variable Rate Investment Loan

2.59%

2.61%

Easy Street Financial Services Standard Variable Investment Loan

2.59%

2.63%

Reduce Home Loans Investor Rate Lovers Variable Loan

2.69%

2.69%

Source: RateCity.com.au. Data accurate as of 02.09.2020.

Lowest car loan rates

A car may not be the first thing you think to spend money on during a recession. In fact, car sales have dropped by 20 per cent in the 12 months leading to July 2020, according to IBISWorld data.

However, many Australians will still be looking to put the pedal to the metal and buy a new car this year, and falling car sales may work in their favour.

As car dealers continue to lose out on commissions and carmakers see their profits decrease, buyers may now have the power. If you’re looking to get a new car, you may be in a better position than ever to negotiate a lower price.

Keep in mind that this isn’t forever, as IBISWorld research predicts that this drop in new car sales may be only temporary.

For those looking to drive away with a bargain, here are some of the lowest car loans on the market.

Company Min Rate Max Rate Notes
Queensland Country Bank New Car Loan

2.99%

2.99%

Australian Military Bank Car Loan From 3.60%

7.30%

Rates start from 3.6% and vary based on your credit score and other circumstances.
Loans.com.au Green Car Loan

3.97%

3.97%

Northern Inland CU Smart Personal Loan Fixed

3.99%

3.99%

Stratton Car Loan

4.05%

16.00%

Rates start from 4.05% and vary based on your credit score and other circumstances.

Source: RateCity.com.au. Data accurate as of 02.09.2020.

Highest savings rates

As home loan rates plummet, savings rates continue falling too. This is not good news for Aussies looking to boost their savings, whether for a holiday, new car or home deposit.

However, there are still a few providers offering rates higher than 1.50 per cent. In fact, Westpac is offering a generous 3 per cent interest to young Australians between 18 and 29.

If your savings account rate has been lacklustre for too long, it may be worth considering shopping around and seeing what other options are out there.

Savings account Base rate Max rate Conditions
Westpac Life (< 30 years)

0.4

3

Balances up to $30k. 5+ debit card purchases on your Westpac Choice account, and grow your account balance each month.
ING Savings Maximiser

0.1

1.65

Deposit $1k in linked transaction account. Make 5+ card transactions each month.
MyState Bank Saver Account

0.15

1.65

Deposit of $20 + 5 eligible purchases in linked transaction account in calendar month.
Ubank USave with USpend

0.54

1.6

Deposit $200+ a month in linked transaction. Balances up to $250,000.
MOVE Bank Bonus Saver

0.4

1.6

Deposit $200+ and no withdrawals within a calendar month.
Up Saver

0.1

1.6

5+ card purchases per month from linked transaction account.

Source: RateCity.com.au. Data accurate as of 02.09.2020.


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