Need to know: Latest low down on your savings, home loan & credit card

Wondering what an unchanging official cash rate means for your home loan, savings and credit card spend? You could be stuck with a dud product without even knowing it. Mozo translates the rate and gives you the low down on where to chase down the most for your money in the current market.

With the official cash rate on hold at 2.50% for more than 6 months now it’s easy to sit there scratching your head and wondering, well that’s all well and good but how does that affect me?

Mozo dives into the data and shows you what the cash rate has in store for Savers, Borrowers and Credit Card holders and where to go for the best deals right now.

What home buyers & owners need-to-know

The cash rate may be on hold but that doesn’t mean rates are. With the official RBA cash rate going nowhere for more than 6 months now banks are going there own way to try to drum up business. Which means even more competitive rates for you! Hooray!

Variable rates

If you’re looking for variable rate and prefer to do your banking with a big brand HSBC has cut the rate on its Home Value variable loan to 4.75%, giving it the lowest variable rate offered by a lender with a branch network. They are also waiving up-front fees and the loan doesn’t have any ongoing fees. If you’re happy to go with an online only lender the best variable rate is still loans.com.au, starting at 4.49%.

Fixed rates

Competition is also hot in the fixed rate field providers driven to new lows to try to compete. Three of the four providers (including Westpac, ANZ and NAB) now offer the same three-year fixed rate home loans at a pleasantly low 5.13%. Looking for a great value fixed rate loan? You’ll find it here.

Small providers

The big banks may be battling it out but it’s still the little guys that offer the best rates. One year rates start as low as the 3.99% offered by IMB, the best 2 year rate is Newcastle Permanent’s 4.64%, and the lowest 3 year rate is QT Mutual Bank’s 4.79%.

Check out Mozo’s Home Loan Compare tool that will help you find the lowest rates for your loan amount and property value.

Sweetner Season

Providers are also competing hard with a plethora of sweeteners to try to set themselves and tempt borrowers to make the switch. 20 lenders are offering sweeteners for new customers, including all four of the major banks. There are twice as many lenders currently offering incentives to new customers than there were last September.

Loan sweetners that keep on giving:

Lender
Incentive

ANZ

Up to 0.90% p.a. discount on standard variable rate

Illawarra Credit Union

1% lifetime discount off standard variable rate

loans.com.au

Dream home loan variable hot summer rate 4.49%

NAB

0.85% off home loans $500K and above. 0.80% off home loans $250K-$499,999.

RAMS

1%p.a. lifetime discount on variable rate

St George

$1,250 rebate plus 1% discount on loans of $500K or more

Westpac

Up to 1% p.a. discount on standard variable rate

What savers need-to-know

A low and steady cash rate means savers have to really go looking to find savings accounts that offer a competitive return.

If you’ve stashed your savings with any of the big 4 banks you’d be well advised to check what rate they’re paying you after they kicked off 2014 by slashing deposit rates by around 10 basis points.

Term Deposits

Although the cash rate is still, Term Deposits are still heading south with average rates all slightly lower than they were at the start of the year. One notable exception is Suncorp, which increased its 6 month to match the best in the market for that term at 3.90%. Suncorp also has the best 1 year term deposit rate at 4.00%, along with a few other providers.

Savings Accounts

ME Bank will pay 4.60% for 5 months on its Online Savings Account as long as you also have its Everyday Transaction Account. However, the best in the market remains UBank’s USaver with Ultra which will pay 4.62% without a time limit, provided you have both a savings and transaction account and meet monthly deposit conditions.

Find the best rates for a term that suits you using Mozo’s Term Deposit Compare tool or try our Savings Compare tool that makes it easy to see the conditions that can apply to special rates.

What credit card holders need-to-know

Although the cash rate is at all time lows, the interest you pay on consumer debt and credit cards is going nowhere fast.

If you’ve hit the credit card hard over the last couple of months there are plenty of providers out there keen to convince you to switch. NAB is offering the longest balance transfer deal with 0% for 15 months. That’s available on all of its cards right now, so take your pick and start saving!

For those disciplined about keeping their balance at zero a low-fee card like Bankmecu Visa Credit Card with $0 annual fee and a low purchase rate of 13.14% will keep the cost of credit low and ensure that if you do have a small overspend you aren’t hit too hard.

Also with March approaching, shoppers who took out 0% purchase rate cards in November could be in for a nasty surprise as half of all honeymoon rates are about to come to an end.

See all the great credit card offers along with the important fees and rates here to find a deal that suits you.

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Need to know: Latest low down on your savings, home loan & credit card was last modified: February 19, 2014 by Kerry Lotzof

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6 Comments - Write a Comment

  1. Having seen many similar sites to this one I’ve noticed that a lot of the information many of those other sites display usually have a slight bias to them.

    However, yours is refreshingly different in that you are providing the most relevant and competitive information for the categories you’re writing about.

    As a value added tip, many lenders now base their variable mortgage interest rates on how much you borrow.
    e.g. You get a better interest rate when your loan exceeds $500k or $750k or even $1m.

    The tip is, if you were looking to borrow $470k from a lender that gave a lower interest rate for a loan of $500k or more, then you would miss out on the lower rate.

    However, by increasing your loan amount to $500k you would enjoy the lower discounted rate.

    I know, many are saying you would have to have a hole in your head to borrow more than what you need.

    Not necessarily so, because you can take the extra $30k you borrowed and put it back into your Offset Account, or leave it in the actual loan as undrawn funds.

    The result is you end up only paying interest on the $470k you wanted to borrow in the first place, yet you get to do so at a lower interest rate.

    Disclaimer: Before doing this, first check with your lender or mortgage broker as each lenders policies will differ.

    Reply
    1. Mozo

      Great tips Dave! And thanks for the compliments.

      Bumping up your loan amount is indeed a savvy way to score a better interest rate but it’s important that borrowers don’t go overboard. Interest rates will eventually rise and if borrowers draw down their offset account to pay for the increased repayments, they may find themselves in an uncomfortable financial position.

      Team Mozo

      Reply
  2. The ONLY way to get a decent rate on your savings is to become a regular ‘churner’ and being open to shuffling your money around between the various saving accounts in order to enjoy their high promotional rates.
    The highest ongoing rate, according to our research, is from NAB’s Ubank.

    Reply
    1. Mozo

      Hi Michael,

      We share your thoughts entirely! Rates are at record lows right now and banks simply aren’t rewarding loyalty. Given this, the best way to make the most of your savings is to become a rate tart – or as you put it, a rate “churner” 🙂

      You are correct in saying that the UBank USaver has the highest ongoing interest rate at 3.31% p.a. but there are many promotional rates right now that would but UBank to shame. In fact, you could earn up to 4.60% p.a. for 5 months with ME Bank or even 4.35% p.a. with ING DIRECT.

      We say it’s time for a rate tart revolution!

      Reply
  3. With regards to credit cards, in order to get the BEST one for you, you need to first determine which of the following groups you fall into:

    1. Pay the outstanding balance on the card IN FULL each and every month ; or

    2. Carry a balance on your credit card.

    If you are in group 1, your most important consideration should be getting low (and preferably zero) FEES & CHARGES.
    If you are in group 2, your most important consideration is getting the absolute lowest ONGOING INTEREST RATE.

    Don’t fall into the trap of promotional balance transfer offers! Unless you are VERY disciplined in paying off your debt, you will, in all likelihood, actually end up worse off than if you didn’t take this offer.
    Furthermore, as each application for a credit card is recorded in your personal credit file, regular ‘churning’ of your credit card might result in you being perceived as a higher risk borrower by future lenders who look at your credit file.

    Reply

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