This is a round-up of rates in May and some may have changed since the time of writing. To check on today’s rate, click on the highlighted product.
Following the RBA’s 50 basis point cut at the start of May most lenders have now dropped their home loan rates, however all but one have chosen to keep some of the rate cut for themselves.
The average standard variable rate from all home loan lenders is down 32 basis points from the start of May to sit at 6.67%.
The only lender on the Mozo website to pass on the full 50 basis point cut in May was Unicredit which is based in Western Australia and open to all borrowers. Unicredit’s rate of 6.10% is not too far behind the best standard variable rate in the market, UBank’s Uhomeloan at 5.83%.
We are starting to see more competition in personal loan rates as some lenders start passing through some of the Reserve Bank’s cuts. Fixed rates on secured loans have fallen most, with the average down by 46 basis points to 10.17%. Average rates on variable secured/unsecured loans and fixed unsecured loans have only fallen by 5 to 7 basis points.
Credit cards too are starting to feel the benefit of lower interest rates, although still far from a widespread phenomenon. The average rate across the market has edged down only slightly but we did see a few notable changes.
Of the four major banks NAB is leading the way with cuts of 25 basis points across their whole credit card range, except their new flybuys Rewards Card which received a generous 50 basis point cut. ANZ also trimmed rates by 25 basis points, although a couple of their cards missed out on any reduction.
What a difference a month makes! The best term deposits rates at the start of May were 6.01% for 6 months and 5.90% for one year. Now the best 6 month rate on offer is UBank at 5.51%, while the best 1 year rate is 5.30% – a full 60 basis points below last month’s best – offered by Police & Nurses Mutual Banking and Summerland Credit Union.
Competition is still running hot for deposit funds to help alleviate the need to seek offshore funding so the banks have been treading a fine line between attracting new deposits and not paying more than they need to for those funds. ANZ cut 50 basis points off both of its leading savings products but its Online Saver’s bonus rate of 5.50% (paid until the end of October) is still the highest of the big four. Westpac cut its Reward Saver rate by 30 basis points to 5.35% to take the title of the best ongoing (conditional) rate from the majors.
The RAMS Saver account was launched earlier this year but restricted to its home loan customers. This has now been opened to the public and offers one of the best rates available – a bonus rate of 5.75% if at least $200 is deposited and no withdrawals are made in the month, with a base rate of 4.95% paid in months where the conditions are not met
Economists are tipping more rate cuts over the coming months, so good news for those with loans but bad news for depositors. We’ve seen the banks and other lenders choosing their own paths with rates so, now more than ever, it really does pay to keep an eye on interest rates your bank is offering you. The Mozo Rate Chasers will be here watching the banks and helping you to find the best rates.