This is a round-up of rates in October and some may have changed since the time of writing. To check on today’s rates click on the highlighted product.
Variable rate loans have remained static throughout October, but the Mozo Rate Chasers have detected a definite trend in fixed rates. Expectations are building that the next move from the RBA will be to lift the official cash rate rather than any further reductions. In anticipation of this lenders are increasing their fixed rates, particularly those for longer terms.
In the last month all four of the major banks have increased their fixed rates for some terms, although only for terms 3 years or more. Their 1 and 2 year fixed rates have not moved yet.
Across the whole market in September we saw 8 lenders increase fixed rates across any term, while 17 reduced them. In October this has changed to 10 lenders increasing rates and only 14 making any cuts. Perhaps more revealing is the size of the increases being made – in September the average increase was 15 basis points but in October that has shot up to 26 basis points. While this doesn’t give us certainty that the bottom of the rates cycle has already passed us, indications are that many bankers and economists think it has.
The average 1 year rate is 4.82% now, but the best 1 year rate if you want to fix all of your home loan is Greater Building Society’s 4.29%. Looking at 3 year fixed rates the average across the market is 5.03% but the best fully fixed rate is ME Bank’s 4.69%.
Check out Mozo’s Home Loan Compare tool that will help you find the lowest rates for your loan amount and property value.
Rates for deposits haven’t changed much in the last month but. unlike fixed home loans, both term deposit and at call rates continue their downward march.
The average rate for a 6 month term deposit of $25,000 fell 3 basis points in the last month, for 1 year deposits the average rate held steady, but for 2 year deposits it’s down 2 basis points. Not large movements, but shows that it is still tough for those with cash in the bank to find a good rate.
The average 1 year term deposit rate is at 3.62%, but ING Direct are offering 3.90%, Greater Building Society will pay 3.80% and Bankwest have a 3.70% rate. If you want to commit for 2 years the average rate is 3.85% but there are offers such as Greater Building Society’s 4.15% and ING Direct’s 4.10%,
For a month without an RBA cash rate cut there sure were a lot of providers reducing their at call deposit rates. During October 12 providers cut at least one of their at call deposit rates.
With an average ongoing rate of 2.60% for all savings products the 4.67% offered by UBank for their USaver and Ultra transaction account combination looks very attractive indeed. To obtain the bonus rate you need to deposit at least $2,000 in the month, which may be achievable if you have your salary paid in.
If you don’t want to have to jump hurdles to get a good rate ING Direct’s Savings Maximiser is offering a variable welcome rate of 4.50% – after that it pays 2.75% with the option of a bonus 0.50% every month your balance is increased by $200 or more.
Credit card holders are still being taken for granted by most banks and credit card providers. The average purchase rate on credit cards in the Mozo database has actually increased slightly over the past year, from 17.07% to 17.09%, while the RBA’s official cash rate has dropped by 1%.
As many of us have cards from the big 4 banks let’s see what they’ve done with their rates over the last year:
- ANZ – reduced the rate on its Low Rate and Low Rate Platinum cards by 15 basis points. All other cards have seen no changes.
- Commonwealth Bank – cut the rates on all of its cards by 25 basis points.
- NAB – increased the rate on its Low rate card by 75 basis points and left all other card rates unchanged.
- Westpac – has not changed card rates at all.
So if you’re with a big bank and looking for an alternative that might treat you better, where to look?
Greater Building Society has passed on all 100 basis points of the RBA rate cuts to its Greater Visa customers, now offering one of the best rates around at 11.50%. Next best is Beyond Bank which passed on 91 basis points to holders of its Low Rate card, now at 12.99%.
Mozo’s Credit Card compare tool can help you find the cards with the lowest rates and fees.