This is a round-up of rates in November and some may have changed since the time of writing. To check on today’s rates click on the highlighted product.
As we wait to see whether the RBA will deliver an anticipated Christmas rate cut tomorrow, the Rate Chasers take a look at where the best options are now for borrowers and depositors.
The big 4 banks’ average standard variable rate is 6.62%, but if you’re prepared to look outside the square there are much better deals to be found. Even staying with the big 4, the average rate they offer for packages on loans of $300,000 is 5.86%, but don’t forget there will be a hefty annual fee (almost $400) to pay as well in order to get those rates.
Across the whole market the average standard variable rate is currently at 6.26%, and that drops to 6.05% if we look at all loans available for $300,000 including ‘package’ deals. The best are still much lower though – State Custodians have 5.39% for loans with an LVR of 75% to 90%, loans.com.au are offering a special rate of 5.42% and UBank is on 5.47%.
Much of the action has been in fixed rates. While further cuts by the RBA will see variable rates come down, there would need to be at least two 25 basis point cuts before matching the best fixed rates currently.
During November the average 1 year fixed rate eased by 5 basis points with a range of lenders competing to offer the lowest in the market. UBank is leading the charge with a rate of 4.79% fixed for 1 year (refinances only). There are a couple of lenders making a play for those who want to hedge their bets by fixing part of their loan and leaving the rest variable. iMortgage will go as low as 4.89% but only allows up to 50% fixed, as does eMoney and their 4.99% rate. For those who want to fix the full amount and don’t fit with any of the loans mentioned above, Greater Building Society’s package rate of 4.99% is easily best, followed by My Mortgage Freedom’s 5.09%.
While there could be more rate cuts to come over the next 12 months, fixing at least part of your loan would seem a sensible move with low rates like these on offer.
The Rate Chasers have observed a shift in the at call savings account market with previous market leaders reducing the competitiveness of their deposit accounts. The changes have been most dramatic when looking at the price leading introductory rates that have been used over the past few years to entice new customers through the doors.
From 1 October 2012 to the end of November, the average ongoing rate (whether conditional or not) fell 21 basis points, however over the same period the average introductory rate is down 31 basis points. This suggests to us that there is now more focus on retaining existing customers rather than attracting new business.
The largest cuts to introductory rates have been to RaboDirect’s High Interest Savings (5.71% to 5.11%, down 60 basis points), ING Direct’s Savings Maximiser (5.60% to 5.10%, down 50 basis points) and Bankwests’s Telenet Saver (5.50% to 5.10%, down 40 basis points). In each of these cases the ongoing rate after the introductory bonus has expired has only been reduced by 25 basis points.
It’s not all good news for ongoing rates either though. UBank slashed its headline rate from 5.71% to 4.91%, a rate matched or bettered by offerings from some big 4 banks, a situation we haven’t seen since the launch of the online brand. The RAMS Saver still has a market leading rate, even though it’s been cut from 5.75% to 5.17%.
Term deposit rates are not much better right now but, if as expected there are more cash rate cuts coming our way, it may still be worth hunting out one of the better deals if you want some income security. ME Bank has a great range of rates that are available to members of industry superannuation funds or union members. They will pay 5.0% for 3 months or 4.70% for 6 months – both rates are the best available for those terms. Others worth considering include Suncorp’s 4.90% for 5 months, UBank’s 4.91% for 9 months, or Bankwest’s 4.90%, also for 9 months. There are also some decent rates around for terms of a year or more.
To see all options for terms that you are interested in, try our Term Deposit comparison tool.
2012 has been a year spent in uncharted waters as the banks seek to weaken the link between their rates and the RBA’s decisions, whether by how much gets passed on or when they review their rates. With rates moving frequently it’s more important than ever to be aware of the rates that apply to your loans and bank accounts. Mozo’s Rate Chasers are committed to identifying trends and finding the best rates for you, so check back next year to make sure you stay informed.