Ratehacker: The Best Interest Rates for Loans and Credit Cards in March

With home loan rates continuing to plummet despite the Reserve Bank of Australia’s cash rate still being on hold, and property prices skyrocketing once again, it’s been an interesting start of the year for your personal finances.

The latest figures from the ABS show the value of new home lending hit $28.75 billion in January, up 44 per cent year-on-year, in seasonally-adjusted terms. And RateCity research found that for these new customers, the timing is ideal for more affordable mortgage repayments.

Analysis of owner-occupier rates from RateCity’s database, and property prices from CoreLogic, found that mortgage repayments are $140 less a month for the average new home buyer than in the previous housing peak of October 2017. This is due to the average owner-occupier interest rate falling by 1.42 per cent in this time period.

That being said, let’s take a look at some of the most competitive home loan options available, as well as who is offering generous credit card sign-up bonuses, and where you can nab a low-rate car loan.

Fixed home loans, done dirt cheap

Just when you thought they couldn’t fall any further, 151 home loan rates from 57 lenders are now below 2 per cent, according to the RateCity database. The current lowest fixed rate on offer sitting at 1.69 per cent from Greater Bank (for NSW, ACT and QLD residents only).

While the RBA has said it doesn’t expect to lift the cash rate again until target inflation levels of 2-3 per cent are met, you still cannot really predict the bottom of a market. For customers wondering if they should ride out the variable-rate wave of lower interest rates or just lock in a fixed low-rate loan now, it’s worth asking yourself: how low do you think it’ll go?

Here are some of the lowest owner-occupier fixed rate home loans (paying principal and interest) on the market for those hoping to lock in a competitive rate while they’re still under 2 per cent:

• Greater Bank’s 1-Year Fixed Great Rate Fixed Home Loan at 1.69% (for NSW, ACT and QLD only)
• UBank’s 3 Year Fixed at 1.75%
• HSBC’s 2-Year Package Fixed Rate Home Loan at 1.88%
• Homestar Finance’s 2 Year Fixed Rate Special Owner Occupied at 1.88%

Source: RateCity.com.au. Data accurate as of 05.03.2021.

Low mortgage rates for low LVRs

For existing borrowers considering refinancing their mortgages, it’s worth keeping in mind that some of the lowest home loan rates on the market are reserved for borrowers with low loan-to-value ratios (LVRs).

If you’ve paid down a considerable amount of equity into your mortgage, you may be eligible for some of these more competitive interest rates if you refinance. This is because lenders typically view customers with bigger deposits or more equity in their loans as more financially responsible. They are more likely to offer these customers a more competitive interest rate, generally speaking.

Here are some of the lowest variable owner-occupier rates on the market (paying principal and interest) right now, and the LVR you need to qualify:

• Reduce Home Loans Rate Cutter at 1.79% (LVR <60%)
• Homestar Finance Star Gold at 1.79% (LVR <60%)
• Pacific Mortgage Group Standard Variable at 1.89% (LVR <60%)
• Northern Inland Credit Union Dream Value Package at 1.89% (LVR <60%)

Source: RateCity.com.au. Data accurate as of 05.03.2021.

Biggest sign-up points for credit cards

As credit card interest rates aren’t known for typically fluctuating outside of their average score of around 15-17 per cent, it’s worth exploring the card issuers offering generous sign-up bonuses in March.

Just keep in mind that there is more to a credit card than the rewards and perks it offers. You’ll still have to meet repayments, be aware of any interest rates and fees and use the credit card responsibly.

Here are some of the biggest sign-up bonus points on offer for credit cards:

Source: RateCity.com.au. Data accurate as of 05.03.2021.

Used car loan rates to hit the road with

Only a few months ago reports were showing that used car prices had ballooned by almost 30 per cent during Covid-19. And with more and more Aussies choosing alternatives to public transport due to Covid-19 fears, if you’re looking to purchase a used car, keeping costs down may be a priority.

One way to reduce your car loan repayments is to compare options that have lower interest rates. While you’ll still need to factor in potential fees against your budget, a lower-rate car loan is one place to start.

Here are some of the lowest car loan interest rates on offer for March:

• Credit Concierge – from 3.85%
• Driva – from 3.94%
• Car Clarity – from 3.95%
• Loans.com.au – at 3.97%
• Australian Military Bank – from 3.99%

Source: RateCity.com.au, data accurate as of 05.03.2021.