Ratehacker: July’s Top Home Loans, Savings Accounts and Personal Loans

For the third consecutive month, the Reserve Bank of Australia has hiked the official cash rate, which could spell good news for savers and not-so-good news for borrowers.

The RBA Board’s July meeting resulted in another double hike of 50 basis points, bringing the cash rate up to 1.35% – an increase of 1.25% over three months.

Banks have responded to the RBA’s move by hiking their home loan, term deposit and/or savings account interest rates. But not all lenders have passed on the hike to both borrowers and savers, at least not in full.

Home Loans

At the time of writing, 27 lenders have increased their home loan interest rates for owner-occupiers following the July announcement. All 27 lenders have passed on the full 0.5% increase this month, including all of the big four banks (ANZ, CommBank, NAB and Westpac).

For many variable rate mortgage holders, this will be the third time in as many months that they may see their home loan repayments increase. And while those on fixed rates may not be seeing the impact on their household budget yet, it’s only a matter of time before their fixed period ends, and they’re faced with steep revert rates.

If your mortgage is on a variable rate, or your fixed rate period is reaching expiration, it could be worth comparing your refinancing options. Finding a lower-rate home loan could give you some breathing room and help you avoid falling into mortgage stress.

But before you consider refinancing, ensure that you hold at least 20% equity in your home, as you may have to pay Lender’s Mortgage Insurance if you refinance with any less.

Here are some of the top-rated home loans for refinancing:

· Pacific Mortgage Group Standard Variable Home Loan – Interest Rate 2.49% p.a (Comparison Rate 2.49% p.a)

· Freedom Lend Freedom Variable Home Loan – Interest Rate 2.49% p.a (Comparison Rate 2.53% p.a)

· Homestar Finance Star Gold Home Loan – Interest Rate 2.44% p.a (Comparison Rate 2.49% p.a)

· Yellow Brick Road Agility Home Loan – Interest Rate 2.44% p.a (Comparison Rate 2.48% p.a)

· P&N Bank & Basic Home Loan – Interest Rate 2.44% p.a (Comparison Rate 2.44% p.a)

Savings Accounts

In stark contrast to mortgage holders, Australian savers who are eager to see their nest eggs grow after a long season of abysmal savings rates will likely be grateful to see a third rate hike so far this year. At the time of writing, a total of 19 banks have hiked their savings account interest rates since the RBA’s most recent announcement on 5 July.

Of the 19 banks, 11 have passed on the full hike of 0.5% (including the big four), one bank has passed on a partial hike of 0.25% and seven have announced savings rate rises of more than 0.5%.

If you’re wondering how your current savings account stacks up and want to avoid missing out on bigger returns, check out some of the higher savings account interest rates currently on offer:

• BOQ Future Saver Account (Under 35) – 3.00%
• Westpac Life – 18 to 29 years old – 2.50%
• ING Savings Maximiser – 2.10%
• Citi Online Saver – 2.10%
• Rabobank High Interest Savings Account – 2.10%

Keep in mind that some rate increases, for both home loans and savings account, may not be reflected yet as the date effective has not yet passed. Visit RateCity’s Cash Rate Tracker for more details.

Personal Loans

Borrowers with existing personal loans may only see their interest rates affected by cash rate rises if they are on variable interest rates. However, personal loan rate hikes typically won’t be as immediate as home loan rate rises.

If you’re in the market for a new personal loan, there are still plenty of competitive rates available, whether you’re looking for finance to book a trip away, tackle a renovation project or consolidate existing debts.

Here are some of the top-rated personal loans at present:

• Alex Bank Personal Loan at 5.24% (comparison rate 5.24%)
• Harmoney Personal Loan at 5.35% (comparison rate 6.14%)
• Police Bank Personal Loan at 5.79% (comparison rate 5.92%)
• Bank of Heritage Isle Personal Loan at 5.79% (comparison rate 5.92%)
• G&C Mutual Bank Personal Loan at 5.99% (comparison rate 6.20%)