Interest rates

Value for homebuyers, green cars, savers

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Interest rates continue to rise and the cost of living continues to rise. Meanwhile, the Reserve Bank of Australia (RBA) is trying to restore the normality of the cash rate and economy. Despite these dire fiscal conditions, there are still opportunities to secure favorable rates on a range of financial products.

In early August, the RBA raised the cash rate for the fourth consecutive month, raising it by 50 basis points to 1.85%. The All four big banks passed on the full rate hike to existing borrowers. New customers can avoid this loyalty tax by taking out mortgages at low fixed rates, while refinancing possibilities can be advantageous for current mortgage holders.

It’s hard to determine when these rate hikes will end. It is a good idea to compare the market before making any lasting decisions. Let’s explore some of the most competitive interest rates for homebuyers, green car buyers, and avid savers.

The lowest variable interest rates on home loans

The RBA has raised interest rates for four consecutive months. RateCity to research reveals that homeowners with a home loan balance of $500,000 and 25 years remaining on their mortgage could find themselves paying $472 more in August than they did in April of this year.

For homeowners, this is a significant expense to add to their existing household budget – the equivalent of around two utility bills or a long weekend. Prospective buyers may want to free up space in their budget to accommodate higher future repayments.

Borrowers looking for a fixed rate home loan can avoid mortgage stress in the short term, as many banks have reduced their rates for these types of loans.

Remember that once the fixed rate period expires, the mortgage will likely revert to a variable interest rate. This is often the lender’s standard variable rate, which is higher than the discounted variable rate that many lenders offer to attract new customers.

Lowest variable home loans for homeowners based on RateCity database

Source: RateCity.com.au Rates apply to homeowners who pay principal and interest. The rates come from lenders who announced rate hikes in August. LVR requirements may apply. Data accurate as of 08/12/2022.

Lowest fixed rate home loans for homeowners based on RateCity database

Source: RateCity.com.au Rates apply to homeowners who pay principal and interest. The rates come from lenders who announced rate hikes in August. LVR requirements may apply. Data accurate as of 08/12/2022.

Lowest Variable Home Loans for Investors Based on RateCity Database

Source: RateCity.com.au Rates apply to investors who pay principal and interest. The rates come from lenders who announced rate hikes in August. LVR requirements may apply. Data accurate as of 08/12/2022.

Competitive green car loans

Over the next few years, more Australians are likely to switch to electric vehicles, as new models are available and petrol cars are banned or removed. Now might be the time to consider comparing your green vehicle financing options.

For those considering the switch to electric vehicles (EVs), affordability remains the biggest hurdle. While a new low-cost gas-powered vehicle might cost you between $15,000 and $20,000, the the most affordable electric vehicles in Australia start at $45,000.

Choosing a competitive green auto loan is the first step to making sure your repayments are affordable. Green car lenders often offer eligible customers lower interest rates, on average, to encourage them to purchase sustainable vehicles.

Lowest Green Car Loan Rates Based on RateCity Database

High Rate Term Deposits

Interest rate hikes are generally good news for savers, but you might be wondering if it’s better to lock your funds in a term account or deal with rising rates with a high interest savings account? Everyone’s circumstances are different. If you find it difficult to dip into your savings, you may find that a term deposit suits you better.

Unlike other investment options (stocks, EFTs, bonds), term deposits are supported by the Financial Claims Scheme, also known as a government guarantee. Holders of deposits with Authorized Depository Institutions (ADIs) are supported up to $250,000, in the event the provider goes bankrupt. This collateral can help reduce your investment risk.

No matter what you choose, be sure to compare all of your options before committing.

Highest term deposit rates based on RateCity (with $20,000 deposit)