Interest rates continue to rise and the cost of living keeps going up. Meanwhile, the Reserve Bank of Australia (RBA) is attempting to restore normalcy to the cash rate and economy. Despite these dire fiscal conditions, there are still opportunities to score favourable rates on a range of financial products.
At the beginning of August the RBA hiked the cash rate for the fourth consecutive month, lifting it by 50 basis points to 1.85%. The Big Four banks all passed on the full rate increase to existing borrowers. New customers can avoid this loyalty tax by taking out low fixed-rate home loans, while refinancing options may be beneficial to current mortgage holders.
It’s difficult to determine when these rate hikes will end. It’s savvy to compare the market before making any lasting decisions. Let’s explore some of the most competitive interest rates for homebuyers, eco-friendly car shoppers and keen savers.
Lowest variable home loan interest rates
The RBA has lifted interest rates for four consecutive months. RateCity research reveals that homeowners with a $500,000 home loan balance and 25 years remaining on their mortgage could find themselves paying $472 more in August than they were in April of this year.
This is a significant expense for homeowners to add to their existing household budgets – the equivalent of around two utilities bills or a long weekend trip away. Potential homebuyers may want to free up space in their budget to accommodate higher future repayments.
Borrowers seeking a fixed-rate home loan may be able to avoid mortgage stress over the short term, as many banks have reduced their rates for these types of loans.
Remember that once the fixed-rate period expires, the mortgage will likely revert to a variable interest rate. This is often the lender’s standard variable rate, which is higher than the discounted variable rate that many lenders offer to attract new customers.
Lowest variable home loans for owner-occupiers on RateCity’s database
| Lender | Advertised rate |
| Loans.com.au – Variable Home Loan | 3.10% |
| Bank of us – FlexiDiscount Home Loan | 3.29% |
| Homestar Finance – Star Gold Home Loan | 3.58% |
Source: RateCity.com.au Rates are for owner-occupiers paying principal and interest. Rates are from lenders who have announced August rate hikes. LVR requirements may apply. Data accurate as of 12/08/2022.
Lowest fixed-rate home loans for owner-occupiers on RateCity’s database
| Term | Lender | Advertised rate |
| 1-yr fixed | bcu – Fixed Rate | 4.09% |
| 2-yr fixed | The Capricornian – Premium Choice Home Loan | 4.49% |
| 3-yr fixed | Police Bank – Police Value Home Loan | 4.69% |
| 4-yr fixed | Westpac – Premier Advantage Package | 4.89% |
| 5-yr fixed | Macquarie Bank – Basic Home Loan | 5.39% |
Source: RateCity.com.au Rates are for owner-occupiers paying principal and interest. Rates are from lenders who have announced August rate hikes. LVR requirements may apply. Data accurate as of 12/08/2022.
Lowest variable home loans for investors on RateCity’s database
| Lender | Advertised rate |
| Bank of us – FlexiChoice Home Loan | 3.59% |
| AMP Bank – Professional Package Investment ($1m+) | 3.84% |
| Macquarie Bank – Basic Home Loan | 3.89% |
Source: RateCity.com.au Rates are for investors paying principal and interest. Rates are from lenders who have announced August rate hikes. LVR requirements may apply. Data accurate as of 12/08/2022.
Competitive green car loans
Over the next few years, more Australians are likely to switch to electric vehicles as new models become available and petrol cars are banned or phased out. Now may be the time to consider comparing your financing options for eco-friendly vehicles.
For those contemplating the switch to electric vehicles (EVs), affordability remains the greatest barrier. While a low-priced new petrol vehicle could cost you anywhere from $15,000 – $20,000, the most affordable EVs in Australia start at $45,000.
Choosing a competitive green car loan is the first step in ensuring your repayments are affordable. Green car loan lenders often provide eligible customers lower interest rates, on average, to encourage them to make sustainable vehicle purchases.
Lowest green car loan rates on RateCity’s database
| Bank | Rate |
| Driva | From 3.49% |
| Community First Credit Union | 3.99% |
| Illawarra Credit Union | 3.99% |
| MOVE Bank | 4.49% |
| Loans.com.au | 4.99% |
High rate term deposits
Interest rate hikes are typically good news for savers but you may be wondering if it’s better to lock your funds in a term deposit account or ride out the rising rates with a high interest savings account? Everyone’s circumstances are different. If you struggle with dipping into your savings, you may find a term deposit suits you better.
Unlike other investment options (shares, EFTs, bonds), term deposits are supported by the Financial Claims Scheme, also known as the government guarantee. Deposit-holders with authorised deposit-taking institutions (ADIs) are backed up to the value of $250,000, in the event the provider were to go under. This guarantee can help reduce your investment risk.
No matter what you choose, be sure to compare all your options before committing.
Highest term deposit rates on RateCity’s database (with a $20k deposit)
| Bank | Rate | Term |
| AMP Bank | 4.35% | 5 years |
| Judo Bank | 4.25% | 5 years |
| Rabobank Australia | 4.00% | 5 years |
| RACQ Bank | 3.85% | 5 years |
| Challenger | 3.75% | 5 years |
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