The Reserve Bank of Australia (RBA) has left the cash rate on hold again this month at its record low of 0.10%, but that hasn’t stopped a shake up in the home loan market.
The Australian Prudential Regulation Authority (APRA) has increased the minimum interest rate buffer for banks to use when assessing the serviceability of home loan applications.
This means that instead of testing a borrower’s ability to meet repayments with a 2.5% buffer, it now expects Authorised Deposit-taking Institutions (ADIs) to assess this at 3%. Moving forward, gaining mortgage approval may now be harder for some would-be borrowers as home values continue to rise, while wage growth remains stagnant.
Meanwhile, lenders across the market have been taking the scissors to variable home loan rates, with 27 lenders slashing at least one variable rate in the last month. There are still dozens of home loan rates starting with a ‘1’ up for grabs – including for investors.
And as COVID-related restrictions begin to ease over the next few months, your financial goals may take centre stage once again. If you’re hoping to fund a wedding, holidays or even home renovations, there are a range of competitive personal loan rates up for grabs.
Speaking of travel, if a domestic or international trip is on your bucket list over the next few months (restrictions-pending) you may be in the market for a new frequent flyer credit card. And credit card providers big and small are putting big sign-up bonus points offers on the table to entice new customers.
Let’s explore some of the most competitive interest rate offerings for October.
Owner-occupier variable home loan rates below 2%
APRA changes to buffer rates come off the back of its recent figures that show 21.9% of all new loans funded in the June quarter were six times the incomes of borrowers. This debt-to-income ratio is considered risky by APRA.
For those currently repaying a large mortgage, one way to help reduce your risk of being unable to meet your mortgage repayments is to refinance to a lower rate option.
While there are risks and costs associated with any major financial decision, reducing your monthly repayments by refinancing may help free up some much-needed cash for your budget. Further, if the new lender allows you to make extra repayments, you may want to continue to repay your mortgage at the original rate, helping to reduce your principal – and debt-to-income ratio – faster.
When the RBA last cut the cash rate in November 2020, there were only six variable rates below 2%. According to RateCity research, today there are 43 owner-occupier variable home loan rates (paying principal and interest) below 2%.
- Reduce Home Loans Super Saver 60 at 1.77%
- Pacific Mortgage Group Standard Variable Home Loan at 1.79%
- Homestar Finance Star Gold Home Loan at 1.79%
- Freedom Lend Freedom Variable Home Loan at 1.84%
Investor variable home loan rates below 2%
On average, investor home loan rates can be higher than those offered to owner-occupiers. However, if you’re an investor considering refinancing your mortgage, there are still 13 variable home loan rates below 2% (paying principal and interest) up for grabs, according to the RateCity database.
- Northern Inland Credit Union Dream Value Package Investment Loan at 1.89%
- Reduce Home Loans Investor Rate Lovers Variable Loan at 1.99%
- Homeloans.com.au Low Rate Home Loans at 2.04%
- Pacific Mortgage Group Standard Variable Investment Loan at 2.09%
Personal loans to fund your post-lockdown goals
With the light at the end of the COVID tunnel in sight for parts of Australia in lockdown, if you’ve put your plans on the backburner, now may be the time to take them off.
Whether you want to install summer-friendly improvements in your home such as a new pool, automatic-awnings, or solar panels, or finally can plan your dream wedding, a personal loan may help you to fund a range of projects or objectives.
Some of the most competitive in the market include:
- Alex’s Personal Loan (Excellent Credit) at 4.99%
- Harmoney’s Personal Loan (Excellent Credit) at 5.35%
- OurMoneyMarket’s Personal Loan (Excellent Credit) at 5.45%
- Symple Personal Loan (Excellent Credit) at 5.75%
Credit cards that reward your return to travel
Domestic and international travel has been put on pause for many Australians in 2021, but with Prime Minister Scott Morrison tipping international borders to open as early as November, frequent flyer points may become more appealing for credit card customers.
Whether you fly for business or want to visit relatives overseas, if you’re shopping around for a new credit card, it may be worth comparing how it benefits travellers. This may include anything from airline rewards programs offering flight and hotel upgrades, rental car bookings and overseas medical insurance.
If you’re hoping to get the biggest bang for your buck, one way to compare frequent flyer credit cards is by looking at the sign-up bonus points offering. Bonus frequent flyer points may help you in returning to the skies more comfortably by being exchanged for airline program perks.
Some of the biggest sign-up bonus points offerings for frequent flyer credit cards include:
- Qantas Money Qantas Premier Titanium at 150,000 points
- American Express Velocity Platinum Card at 120,000 points
- ANZ Frequent Flyer Black at 120,000 points
- Westpac Altitude Qantas Black Frequent Flyer at 120,000 points