Ratehacker August: The Best Interest Rates for Loans and Credit Cards This Month

With Aussies living in several major cities being restricted by some length of stay-at-home orders, it’s to be expected that our spending habits might have changed as a result.

But while the latest Commonwealth Bank (CBA) Household Spending Intentions report revealed month-on-month declines in all spending categories except health & fitness, and education, new RBA data for personal credit card accounts shows a slight month-on-month increase of 0.5 per cent in May.

Plus, despite the fact that Sydneysiders are in their sixth week of lockdown, the Real Estate Institute of NSW (REINSW) reported that the auction clearance rate has continued to hover above 70 per cent – of which REINSW chief executive Tim McKibbin said is “highlighting the resilience of the market.”

So, while plenty of us will be housebound for the foreseeable future with perhaps a bit of extra time up our sleeves, why not take a look at the best rates for loans and credit cards this month to see if yours measure up?

Competitive home loan rates still available

The Reserve Bank of Australia (RBA) board left the cash rate on hold again this month for the eighth month in a row, while house prices are forecast to continue to climb.

In its new 2021 property growth forecast, big bank NAB has predicted continued double-digit growth in capital city house prices, but with further predictions that these gains will be cut in half by 2022.

Whether you’re planning to put house hunting on hold until prices stabilise as forecast or are eager to act quick and get into the market before Christmas, it’s worth knowing that there are still plenty of competitive home loans on the market.

Here are some of the lowest rate owner-occupier fixed home loans (paying principal and interest) currently available:

• Hume Bank’s myBlue Home Loan at 1.94%
• Well Home Loans’ Well Balanced Home Loan at 2.14%
• Freedom Lend’s Freedom Fixed Home Loan at 2.07%
• Tic:Toc’s Live-in Fixed Home Loan at 2.14%

Source: RateCity.com.au. Data accurate as of 04.08.2021.

Personal loans helping you ‘go green’

Those already in their own home might be more interested in what rates are available for home improvement loans – including green personal loans, which are tailored towards energy efficient home updates and purchases.

The Clean Energy Regulator’s latest Quarterly Carbon Market Report revealed that rooftop solar, under the Small-scale Renewable Energy Scheme (SRES), continued its strong growth in the most recent reporting period, with installation up 28 per cent year-on-year.

Many personal loan providers offer green loans that can be used to fund the installation of rooftop solar, along with many other eco-friendly renovation projects and purchases. Interest rates for green personal loans are often lower than standard personal loans as lenders incentivise borrowers to ‘go green’.

Here are some of the lowest rate green personal loans that are currently available:

• Police Credit Union’s Solar Eco Loan at 4.69%
• Australian Military Bank’s Green Loan at 4.15%
• Police Bank’s Green Loan at 5.79%
• Bank of Heritage Isle’s Green Loan at 5.79%

Source: RateCity.com.au. Data accurate as of 04.08.2021.

Car loans on continuous decline

New cars might be hard to come by due to a global chip shortage and used car prices may be inflated as a result, but if you have set your sights on your next vehicle, at least your financing options could be in your favour.

According to new RateCity research, the lowest car loan rates have been on a continuous decline since January.

The research shows that on 1 January 2021, the average minimum car loan rate across the RateCity website was 9.87 per cent, while it now sits at 9.57 per cent.

Keeping in mind that your credit score may affect what car loan rate you can get, some of the lowest rate new car loans available right now include the following:

• MOVE Bank’s New Car Loan at 4.59%
• Car Clarity’s Car Loan at 3.95%
• People’s Choice’s Car Loan at 4.65%
• Police Credit Union’s Better Car Loan Fixed at 4.69%

Source: RateCity.com.au. Data accurate as of 04.08.2021.

Credit card debt rut

In just two years, Australia’s credit card debt was cut by almost a third. But new RBA figures show credit card debt accruing interest is hovering around $20 billion for the tenth month in a row.

If you’re finding it hard to make a dent in your credit card balance despite making regular repayments, it might be worth comparing your interest rate to other credit cards on the market.

A balance transfer credit card could give you the breathing room you need to get on top of your debt without accruing additional interest on the transferred balance for a set period of time. But keep in mind, after the interest-free period comes to an end, the interest rate will revert to a typically higher ongoing rate. So, it’s important to focus on paying down the balance within the interest-free period.

Here are some of the balance transfer credit cards offering zero per cent balance transfer rates currently available:

• Bendigo Bank’s Low Rate Credit Card
• HSBC’s Low Rate Credit Card
• NAB’s Low Rate Card
• Citi’s Rewards Credit Card

Source: RateCity.com.au. Data accurate as of 04.08.2021.