This is a round-up of rates in June and some may have changed since the time of writing. To check on today’s rate, click on the highlighted product.
ANZ has played the villain many times over the last few months, leading the way with ‘out of cycle’ home loan rate increases. Roles were reversed in June with ANZ looking like a hero after being the only major bank to pass on the full RBA cut of 25 basis points. The average rate for standard variable loans across the whole market was down only 19 basis points, showing that most lenders chose to keep some of the cash rate cut for themselves.
Even if lenders haven’t passed on all of the recent rate cuts, variable rate loans are particularly appealing right now as fixed rates have been even slower to fall. The lowest 1 year fixed rate is 5.68% offered by Teachers Mutual Bank, while the best variable rate is UBank’s 5.62%. During the last month the average 1 year fixed rate only fell 5 basis points and the average 3 year rate was down 8 basis points.
Why lock in a fixed rate when you can enjoy the lower variable rate and lock in later if the direction of rate movements starts to change?
Providers of the lowest rate cards are intent on retaining that position by cutting them further. Community First’s McGrath Pink Visa had its rate cut from 9.99% to 9.75%, and Greater Building Society’s Greater Visa had its rate slashed from 10.74% to 10.25%. However the majority of providers are still not passing on the benefit of the rate cuts to their credit card customers with the overall average rate barely moving.
Rates here are falling quite sharply with shorter terms the most affected. The average rate for a 6 month term investment is only down 19 basis points to 4.60%, but the big change is the fall in the best rates from 5.65% a month ago to 5.20% now – a drop of 45 basis points. The 5.20% rate is available from Investec, Suncorp and The Rock Building Society with former depositors’ darling UBank a little off the pace at 5.11%.
Looking at longer term average rates the 1 year figure is down19 basis points to 4.67%, 3 years down 16 basis points to 4.85% and 5 years down 17 basis points to 5.01%.
The rates on savings accounts can be adjusted faster than those for a term deposit portfolio, explaining why the two best rates are unchanged from last month. Bankwest remains in the lead in this category with its Regular Saver paying 6.0% interest, however you can only deposit between $50 and $500 each month (and, to make matters worse, the entire balance is swept out to another account every 12 months). Next highest rate is the RAMS Saver which will pay 5.75% on balances up to $500,000, as long as you deposit at least $200 each month and don’t make any withdrawals.
The average at call savings account rate only fell 10 basis points during the month, now at 4.32%. There seems to be insufficient news on the economic front that would prompt the RBA to cut the official cash rate again when it next meets on Tuesday 3 rd July so we could see a month of consolidation where providers think more about strategic positioning. This could mean some of the savings rates taking their delayed plunge, and even some adjustments to fixed home loan and credit card rates.