The RBA lifted the cash rate to 4.10 per cent in June – a scenario borrowers most likely never expected to materialise during the life of their loan, let alone in the space of little more than one year.
Further rate rises could see Australians dip deeper into their savings to help cover the cost of mortgage repayments.
Despite household budgets being stretched to their limits, it’s still possible to nab competitive home loan rates. Additionally, green car loans generally attract lower interest than those for petrol and diesel vehicles. Alternatively, if you’re in a position to put away some of your hard-earned cash, there are banks offering some excellent savings rates right now.
New homebuyers can avoid the banks’ loyalty tax by taking out low fixed-rate home loans, while existing mortgage holders may want to seek out refinancing options to potentially score a better interest rate.
It pays to compare the market before you commit. Let’s explore some of the most competitive interest rates for homebuyers, eco-friendly car shoppers and savers alike.
Lowest fixed and variable home loan interest rates
The RBA has only paused its rate hiking cycle once, in April this year, raising rates a total of 400 basis points since April 2022. The latest RateCity research found mortgage holders on a $750,000 home loan are paying an extra $1,701 each month since the increases began.
This is a significant expense for already struggling homeowners. Prospective homebuyers may want to re-evaluate their budgets as interest rates, and therefore repayments, are tipped to continue to increase in the months ahead.
New borrowers seeking a fixed-rate home loan may be able to avoid some mortgage stress over the short term, as a number of lenders offer competitive, reduced rates for these types of loans.
Remember that once the fixed-rate period expires, mortgages typically revert to a variable interest rate. This is often the lender’s standard variable rate, which is generally higher than the discounted variable rate that many lenders offer to attract new customers.
Given the current real estate climate, property investors may be looking for a little more stability when it comes to their mortgage repayments. It is possible to lock in a fixed rate and pay only the interest charges to help keep your cash flow more manageable. Of course, because you won’t be lowering your loan principal during this time, you may end up paying more in interest charges on the property over the long term.
Lowest fixed-rate home loans on RateCity’s database
| Investor Rates | Lender | Rate | Comparison Rate |
| 1 year fixed | The Capricornian | 5.25% | 7.02% |
| 2 year fixed | Easy Street | 5.49% | 5.58% |
| 3 year fixed | The Capricornian | 4.99% | 6.59% |
| 4 year fixed | Tic Toc | 5.74% | 6.06% |
| 5 year fixed | RACQ | 5.54% | 6.48% |
| Variable | The Mutual | 5.34% | 5.34% |
Source: RateCity.com.au Home loan rates are for owner-occupiers paying principal and interest. Rates are from lenders who have announced June rate hikes. LVR requirements may apply. Data accurate as of 23/06/2023.
Lowest variable home loans for owner-occupiers on RateCity’s database
| Lender | Rate | Comparison Rate |
| The Mutual | 4.94% | 4.94% |
| First Option Bank | 5.24% | 5.24% |
| Police Bank | 5.29% | 5.37% |
| Unloan | 5.34% | 5.25% |
| HSBC | 5.34% | 5.35% |
Source: RateCity.com.au Rates are for owner-occupiers paying principal and interest. Rates shown may not factor in any forthcoming rate rises in June. LVR requirements may apply. Data accurate as of 23/06/2023.
Lowest fixed-rate investor home loans on RateCity’s database
| Category | Lender | Rate | Comparison rate |
| 1 year fixed | The Capricornian | 5.25% | 7.02% |
| 2 year fixed | Easy Street | 5.49% | 5.58% |
| 3 year fixed | The Capricornian | 4.99% | 6.59% |
| 4 year fixed | Tic Toc | 5.74% | 6.06% |
| 5 year fixed | RACQ | 5.54% | 6.48% |
Source: RateCity.com.au Rates are for investors paying principal and interest. Rates are from lenders who have announced June rate hikes. LVR requirements may apply. Data accurate as of 23/06/2023.
Competitive green car loans
May’s monthly sales figures for new vehicles reached an all-time high, according to the Federal Chamber of Automotive Industries (FCAI). Sales of electrified vehicles (battery electric vehicle, plug-in hybrid and hybrid) made up 15.6% of total sales. In fact, the Tesla Model Y was the third most-sold vehicle model during this period.
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.
Selecting a competitive green car loan can help to make repayments and other ongoing costs, such as fuel, more affordable. 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
| Lender | Rate | Comparison rate |
| Community First | 4.99% | 5.75% |
| Horizon Bank | 4.99% | 5.20% |
| Loans.com.au | 5.19% | 6.31% |
Source: RateCity.com.au. Data accurate as of 23/06/2023.
Savings: High-rate term deposits
While rising interest rates are causing financial stress for millions of mortgage holders, long-term savers are celebrating, as some of the highest term deposit rates on offer have risen above 4.50 per cent.
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 secured to the value of $250,000, in the event their provider were to go under. This guarantee can help reduce your investment risk.
No matter what way you choose to invest your funds, be sure to compare all your options before committing.
Savings: Highest term deposit rates on RateCity’s database
| Term | Bank | Rate |
| Transport Mutual Credit Union | 12 months | 5.25% |
| Rabobank | 60 months | 5.20% |
| ME Bank | 12 months | 5.05% |
| Southern Cross Credit Union | 9 months | 5.05% |
| Judo Bank | 12 months | 5.05% |
Source: RateCity.com.au. Data accurate as of 23/06/2023.
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