Ratehacker: The Best Interest Rates for Home and Car Loans in September

While the Reserve Bank of Australia may have left the cash rate on hold yet again at a record-low of 0.10%, lenders across the market have been lifting and cutting interest rates across home loans this month.

Variable home loan rates below 2% are growing in popularity. And while longer-term fixed home loan rates may be on the rise, our appetite for them is still growing thanks to our fear of missing out, according to the latest Australian Bureau of Statistics figures.

Australian interest in purchasing a new vehicle has also been on the rise, despite millions of residents still restricted to travel by COVID-19 protocols. Thankfully there are a range of competitive new car loans on the market to compare right now.

And speaking of COVID-19, our national credit card debt accruing interest numbers have fallen to the lowest level in almost two decades as many take the time in lockdown to pay off their card debts. If you’re hoping to take this time to pay down your debt, it may be worth exploring competitive balance transfer options.

To fix or not to fix

RateCity analysis of ABS data has revealed that the number of homeowners with fixed rate mortgages has increased significantly, climbing from 15.5% in July 2019, to nearly half of all home loans (47.1%) in July 2021.

The popularity of fixed rate home loans has been steadily growing no doubt as a result of the emergency cash rate cut by the Reserve Bank of Australia on 19 March 2020. This cash rate cut saw lenders across the country, including the big four banks, bring longer-term fixed interest rates down to record lows.

But with RBA Governor Philip Lowe tipping the next cash rate hike to come as early as 2024, many lenders are beginning to lift their 4- and 5-year fixed rates again. This may have potentially driven homeowners to fix due to a fear of missing out on a good rate.

If you’re still on the hunt for a competitive 4-year fixed rate, there are still a range of owner-occupier options available, including:

• Teachers Mutual Bank Your Way Plus Fixed Home Loan at 2.14%
• Illawarra Credit Union The Works Package Fixed at 2.15%
• NAB Choice Package at 2.24%
• Hume Bank myBlue Home Loan at 2.24%

Note: Data accurate as of time of writing (08/09/2021)

Variable home loan rates starting with a ‘1’

As fixed rate home loans continue to rise, home loan lenders are beginning to wage a war for new customers through cutting their variable home loan rates. Recently, big four bank, Westpac, slashed its introductory variable rate to 1.99% while hiking its 4- and 5-year fixed rates.

In fact, RateCity research found that the number of variable rates under 2% has grown from 18 to 46 in the last two months alone. This is an increase of 68%, despite the cash rate remaining on hold since November 2020.

If you’re hoping to nab a variable interest rate starting with a 1, here are some of the lowest owner-occupier variable rate loans paying principal and interest:

• Reduce Home Loans Super Saver at 1.77%
• Homestar Finance Star Gold Home Loan at 1.79%
• Pacific Mortgage Group Standard Variable Home Loan at 1.79%
• Freedom Lend Freedom Variable at 1.84%

Note: Data accurate as of time of writing (08/09/2021)

Drive away with low-rate car loans

Despite millions of Australians in lockdown or restricted from showrooms due to the latest COVID-19 regulations, the number of vehicles sold in August grew by 33% year-on-year, according to the latest Federal Chamber of Automotive Industries (FCAI) data.

A total of 81,199 new vehicles were purchased in August 2021, with Queensland, Western Australia, and the Northern Territory, all recording growth greater than 30% compared to August 2020. Even Victorian new vehicle sales rebounded compared to last year, with an increase of over 150%. Understandably however, the ACT and New South Wales both recorded declines in new vehicle sales.

If you’re one of the many Australians hoping to leave lockdown with a new set of wheels or put the pedal to the metal and travel locally in an unrestricted state, it may be worth comparing your new car loan options. There are a range of new car loan lenders in the market offering new vehicle financing rates as low as 2.85%

• Driva Car Loan from 2.85%
• Stratton Finance Car Loan from 2.85%
• Credit Concierge Car Loan from 2.99%
• Money For Jam Car Loan from 3.25%

Note: Data accurate as of time of writing (08/09/2021)

Live debt free in 2021

The impacts of lockdown on some Australia’s finances haven’t been all bad, with the national credit card debt accruing interest slashed to its lowest level since February 2004.

The latest figures from the RBA found that debt accruing interest on personal credit cards now sits at $18.90 billion, with over $1 billion being wiped off between June and July alone. This is the biggest monthly decrease since July 2020 when Australian cities were leaving national lockdown.

While millions of Australians stuck at home would rather be out of lockdown, paying off your credit card debt may help to take away the pressure of some financial stress. If you can budget for it, it may be worth considering if a balance transfer credit card with a healthy interest-free period may assist you in ditching credit card debt for good.

Keep in mind that any additional purchases you make with a balance transfer credit card may immediately begin accruing interest, so it’s best to consider locking the card away while repaying your debt. Further, once this interest-free period ends the card will revert to a higher ongoing purchase rate, so ensure you’ve budgeted to repay your debt in full over said balance transfer period.

Here are some balance transfer offers with the longest interest-free periods:

• HSBC Platinum Credit Card (Balance Transfer Offer) for 36 months
• NAB Low Rate Card for 32 months
• ANZ Low Rate for 30 months
• Citi Rewards (Balance Transfer Offer) for 30 months

Note: Data accurate as of time of writing (08/09/2021)