The Reserve Bank of Australia (RBA) may have kept interest rates on hold in August 2023, but that doesn’t mean we can all rest easy. Inflation is still on the high side, and the cost of living is putting pressure on everyone’s budget. In times like these, it’s more important than ever to carefully compare financial products before you commit, whether you’re buying a house, saving up your money, or hacking rewards points.
Low-interest home loans
Even if the RBA’s hiking spree appears to be on hold for the time being, higher interest rates are still putting pressure on Australian households. Homeowners and investors are struggling to afford higher repayments, which are eating into household savings and forcing earlier property sales.
What’s more, some banks and mortgage lenders have been raising their home loan interest rates out of cycle from the RBA, and pulling back on the cashback deals and special offers that they previously used to encourage homeowners to switch. This may leave first home buyers and existing borrowers facing the fixed rate cliff needing to carefully compare alternative home loan options to help ensure they can afford their repayments.
One place to start is to look at some of the lowest home loan interest rates in August 2023, though you should also compare the fees, features and other benefits of any mortgage before signing on the dotted line.
Some of the lowest rates on RateCity at the time of writing include:
- 5.23% p.a Fixed – 2 years (Comparison Rate* 6.08% p.a) Australian Mutual Bank Special First Home Buyer Fixed Home Loan (Principal and Interest) 2 Years
- 5.34% p.a Fixed – 5 years (Comparison Rate* 6.11% p.a) RACQ Bank Fixed Rate Home Loan (QLD only) (Principal and Interest) 5 Years (LVR < 60%)
- 5.39% p.a Variable (Comparison Rate* 5.40% p.a) Fire Service Credit Union First Home Buyer Loan (Principal and Interest) (New Customer)
- 5.39% p.a Variable (Comparison Rate* 5.43% p.a) Mortgage House Chameleon Executive Saver Home Loan (LVR < 50%)
- 5.45% p.a Variable (Comparison Rate* 5.58% p.a) Arab Bank Australia Low Rate Home Loan Offer Less Than 60
Source: RateCity.com.au. Data accurate as of 03/08/2023.
*This is the comparison rate published by the lender and is on a per annum basis. The comparison rate is calculated for a secured loan for an amount of $150,000 over a 25 year term. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
Savings accounts that beat inflation
Higher interest rates are often a problem for people with loans, but can be a boon for people with savings. The higher the interest rate on your savings account or term deposit, the more interest you may be able to earn on your deposited money, growing your wealth faster and bringing you closer to your savings goal more quickly.
Also, after an extended period of low interest rates, the past year of hikes is finally bringing savings account interest rates above Australia’s rate of inflation. This means that for the first time in literally years, it may be possible to receive more in interest on your savings than you’ll effectively lose to inflation, keeping your money from going backwards. And if inflation continues to fall while the cash rate is kept on pause at 4.10%, savers may continue to come out on top.
Some savings accounts that are higher than the monthly inflation rate of 5.4% as of June 2023 include:
| Bank account | Max rate (when conditions are met) | Max balance for Max Rate |
| ME Bank HomeME | 5.65% | $100k |
| ING Savings Maximiser | 5.50% | $100k |
| Bank of Queensland Future Saver (Ages 14-35) | 5.50% | $50k |
| MOVE Bank Growth Saver | 5.50% | $25k |
Source: RateCity.com.au. Data accurate as of 03/08/2023. Based on highest ongoing rates on products for all adults.
Credit card reward points
We haven’t forgotten about the cost of living – it’s hard not to. And it’s not all anecdotal, either – the numbers don’t lie.
Australia’s total credit card bill grew to more than $17.77 billion last month, showing that many of us are putting more of our expenses on the plastic and finding it harder to clear our balances. Borrowers who are struggling with credit card debts could have several options to consider, such as using a balance transfer card or even a debt consolidation loan to put your interest costs on hold until your card is paid off.
Credit cards also offer other rewards, such as points that can be redeemed for travel benefits and much more. If you’re a points hacker who wants to make the most of credit card bonus reward points and similar offers, just be sure to check the terms and conditions first to make sure you’re not leaving yourself and your money in a vulnerable position.
Some of the top credit card sign-up bonus reward points deals include:
| Provider | Card | Program | Points |
| Citi | Prestige | Citi Reward Points | 275,000 |
| ANZ | Rewards Black | ANZ Rewards | 180,000 |
| St.George Bank/Bank of Melbourne/BankSA | Amplify Signature | Amplify Points | 150,000 |
| Bank of Queensland | Platinum Visa | Q Rewards points | 150,000 |
| Qantas Money | Premier Titanium | Qantas Frequent Flyer | 150,000 |
| Westpac | Altitude Black | Altitude Points | 140,000 |
| NAB | Rewards Signature | NAB Rewards Points | 140,000 |
| Suncorp | Clear Options Platinum Credit Card | Suncorp Credit Cards Rewards Program | 120,000 |
| Bankwest | More World Mastercard | More Rewards | 115,000 |
| CBA | Ultimate Awards | CommBank Award Points | 100,000 |
Source: RateCity.com.au. Data accurate as of 03/08/2023.
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