This is a round-up of rates in March and some may have changed since the time of writing. To check on today’s rates click on the highlighted product.
Over recent weeks many analysts and commentators have been saying we’ve hit the bottom of the rates cycle, with indications lenders are starting to move their loan rates higher again. We may have already hit record low rates, but Mozo has watched fixed rates on home loans continue their downward trend, with many great rates on offer right now for people wanting some certainty in their repayments over the next year or two.
At the start of March Mozo had 13 lenders with 1 year fixed rates at or below 5.0% and now there are 18. The Loans.com.au Dream Loan Express will let you borrow up to 80% of your property value and fix the whole loan at 4.89%.
There are also plenty of great 2 year options with 18 lenders offering rates at or below 5.0% compared with 13 lenders a month ago. There are even two lenders who will let you lock in a rate below 5% for 3 years – ME Bank and Teachers Mutual Bank.
Westpac stands out as one of only a few lenders to increase fixed rates during March, however they made up for that move by increasing the discounts offered on variable package rate loans. The largest discount for loans of more than $500,000 has gone from 0.7% p.a. to of 1.0% p.a. off the Rocket Repay Standard Variable rate loan for a rate of 5.51%. The discount for loans over $150,000 has increased from 0.4% to 0.7%, and for loans over $250,000 it’s gone from 0.7% to 0.9%.
HSBC has joined the fray, dropping the rate on its Home Value loan from 5.84% to 5.25%, while the rates on Bankwest’s Premium Select loan were trimmed by 5 basis points to start from 5.49% (from $200,000, LVR less than 75%). The price leader at the start of the month, loans.com.au, lifted its Blackboard Special rate from 5.09% to 5.22%, leaving UBank’s 5.12% as the cheapest variable rate in the
market. Check out all the amazing home loan rates with Mozo’s Home Loan Compare tool that will help you find the cheapest rates for your loan amount and property value.
Average rates for terms of 1 year or less have continued to decline, but we have seen some rate increases for longer term deposits. To beat ING Direct’s 4.80% for 2 years you’d have to look at 5 year investments and even then the best rate is only a little above that at 5.0%.
Find the best rates for a term that suits you using Mozo’s Term Deposit Compare tool.
RAMS and UBank continue to battle it out for the best variable savings rate. UBank’s 4.91% ongoing bonus rate was the best at the end of February, however RAMS has since increased its rate to 5.01%. The competition between these two is a little ray of sunshine for savers in this low rate environment!
An interesting new product launched during the month is RaboDirect’s Notice Saver account. This account requires you to nominate how much notice you are required to give before any withdrawn funds are available, with interest rates increasing for longer notice terms. At the time of writing the 31 day option pays 4.45%, the 60 day option is at 4.55% and the 90 day option pays 4.65%.
The rates are better than current term deposit rates but are also lower than many ‘ongoing bonus’ savings accounts where you have to meet certain deposit and withdrawal criteria each month or have your rate reduced. The Notice Saver rates are also variable so you don’t have the certainty of income that a term deposit can provide, but may still appeal to someone who doesn’t mind a disincentive to take money out and spend it, or who doesn’t want the bother of the conditions applied to ongoing bonus type accounts. These ‘notice’ type accounts are already common in the UK but I’m not sure if they will take off here.
Economic news of late has largely been neutral or positive, so it’s unlikely that the RBA is going to move the cash rate again anytime soon. With loan and deposit rates set to sit where they are for a while the Mozo Rate Chasers will be keeping a close eye out for any providers who seek to improve their market share through tempting rate and product offers.