The cost of living continues to climb. Although household budgets are tight, you can still score competitive rates if you’re purchasing a home or buying an electric vehicle. And if you’d prefer to stash your cash, there are great savings rates too.
At the beginning of March, the Reserve Bank of Australia (RBA) hiked the cash rate for the tenth consecutive month, lifting it by 25 basis points to 3.60 per cent.
All four of Australia’s major banks announced that they would pass on the full interest rate rise to existing customers on variable rate mortgages. However, new customers can avoid this loyalty tax by taking out low fixed-rate home loans, while refinancing options may be advantageous for current mortgage holders seeking a better deal.
It pays to compare the market before you commit. Let’s explore some of the most competitive interest rates for homebuyers, eco-friendly car shoppers and extended-term savers.
Lowest fixed and variable home loan interest rates
The RBA has been on a tear since May 2022, raising rates a total of 350 basis points. The latest RateCity research reveals that the average owner-occupier with a $500,000 loan and 25 years remaining on their mortgage has seen repayments rise by $983 since April.
This is a huge expense for already cash-strapped homeowners. Prospective homebuyers may want to re-evaluate their budgets as interest rates, and therefore repayments, are tipped to continue to increase in the months ahead.
New borrowers seeking a fixed-rate home loan may be able to avoid some mortgage stress over the short term, as a number of lenders offer competitive, reduced rates for these types of loans.
Remember that once the fixed-rate period expires, your mortgage will likely revert to a variable interest rate. This is often the lender’s standard variable rate, which is generally higher than the discounted variable rate that many lenders offer to attract new customers.
Given the current real estate climate, property investors may be looking for a little more stability when it comes to their mortgage repayments. It is possible to lock in a fixed rate and pay only the interest charges to help keep your cash flow more manageable. Of course, because you won’t be lowering your loan principal during this time, you may end up paying more in interest charges on the property over the long term.
Lowest fixed-rate home loans on RateCity’s database
| Category | Lender | Rate | Comparison rate |
| 1 year fixed | Hume Bank | 4.99% | 5.03% |
| 2 year fixed | IMB Bank | 5.24% | 5.39% |
| 3 year fixed | The Capricornian | 4.99% | 6.30% |
| 4 year fixed | Bendigo Bank | 5.49% | 5.31% |
| 5 year fixed | RACQ Bank | 5.39% | 5.71% |
Source: RateCity.com.au Rates are for owner-occupiers paying principal and interest. Rates are from lenders who have announced March rate hikes. LVR requirements may apply. Data accurate as of 17/03/2023.
Lowest variable home loans for owner-occupiers on RateCity’s database
| Lender | Rate | Comparison rate |
| Bendigo Bank | 4.97% | 5.12% |
| Qudos Bank | 4.99% (effective 23 March) | 4.99% (effective 23 March) |
| Bank of Sydney | 5.04% | 5.06% |
Source: RateCity.com.au Rates are for owner-occupiers paying principal and interest. Rates are from lenders who have announced March rate hikes. LVR requirements may apply. Data accurate as of 17/03/2023.
Lowest investor home loans on RateCity’s database
| Category | Lender | Rate | Comparison rate |
| 1 year fixed | Arab Bank | 5.10% | 7.41% |
| 2 year fixed | Easy Street | 5.49% | 5.16% |
| 3 year fixed | Queensland Country Bank | 4.99% | 6.19% |
| 4 year fixed | HSBC | 5.49% | 5.83% |
| 5 year fixed | HSBC | 5.49% | 5.84% |
Source: RateCity.com.au Rates are for investors paying principal and interest. Rates are from lenders who have announced March rate hikes. LVR requirements may apply. Data accurate as of 17/03/2023.
Competitive green car loans
Australians are starting to come around to sustainable vehicles, with sales of battery electric, plug-in hybrid and hybrid vehicles on the rise, according to the latest figures from the Federal Chamber of Automotive Industries (FCAI). A total of 12,102 zero and low-emission vehicles were sold, including 5,932 battery-electric vehicles.
The Tesla Model 3 recorded 2,927 sales in February, ranking as the third highest-selling vehicle in Australia. Given that deliveries for this particular vehicle only began in August last year, it’s clear that there is a growing demand for green-powered cars.
For those contemplating the switch to electric vehicles (EVs), affordability remains the greatest barrier. While a low-priced new petrol vehicle could cost you anywhere from $15,000 – $20,000, the most affordable EVs in Australia start at $45,000.
Selecting a competitive green car loan can help to make repayments and other ongoing costs, such as fuel, more affordable. Lenders often provide eligible customers lower interest rates, on average, to encourage them to make sustainable vehicle purchases.
Lowest green car loan rates on RateCity’s database
| Lender | Rate | Comparison rate |
| Community First Credit Union | 4.49% | 5.26% |
| Queensland Country Bank | 4.79% | 5.07% |
| Peoples Choice | 4.89% | 5.24% |
High-rate term deposits
While rising interest rates are causing financial stress for millions of mortgage holders, savers are cheering as some of the highest rates on offer have climbed to more than 5% as of March.
Unlike other investment options (shares, EFTs, bonds), term deposits are supported by the Financial Claims Scheme, also known as the government guarantee. Deposit-holders with authorised deposit-taking institutions (ADIs) are secured to the value of $250,000, in the event their provider were to go under. This guarantee can help reduce your investment risk.
No matter what way you choose to invest your funds, be sure to compare all your options before committing.
Highest term deposit rates on RateCity’s database
| Term | Bank | Rate |
| Bank First | 3 months | 3.85% |
| Bank First | 6 months | 4.30% |
| ME Bank | 9 months | 4.50% |
| Bank First | 12 months | 4.55% |
| Judo Bank | 24 months | 4.85% |
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