The best interest rates for home and auto loans in September

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While the Reserve Bank of Australia may have once again kept the cash rate at an all-time high of 0.10%, market lenders have raised and lowered mortgage interest rates this month- this.

Variable mortgage rates below 2% are increasingly popular. And although longer-term fixed mortgage rates are on the rise, our appetite for them continues to grow thanks to our fear of missing out, according to the latest figures from the Australian Bureau of Statistics.

Australian interest in purchasing a new vehicle has also grown, despite millions of residents still being restricted to travel by COVID-19 protocols. Fortunately, there is a range of competitive new car loans on the market to compare right now.

And speaking of COVID-19, the number of our national credit card debt accumulating interest has fallen to the lowest level in nearly two decades as many take the time to lock in to pay off their card debts. If you are hoping to take this time to pay off your debt, it may be worth exploring competitive balance transfer options.

To Repair or Not to Repair

RateCity analysis of ABS data found that the number of homeowners with fixed rate mortgages has increased significantly from 15.5% in July 2019 to almost half of all home loans (47.1%) in July 2021.

The popularity of fixed rate home loans has grown steadily no doubt due to the emergency cut in treasury rates by the Reserve Bank of Australia on March 19, 2020. This cut in treasury rates has seen lenders across the country, including the big four banks, are bringing longer-term fixed interest rates to record highs.

But with RBA Governor Philip Lowe predicting the next cash rate hike to come as early as 2024, many lenders are starting to raise their 4- and 5-year fixed rates again. This may have led homeowners to repair for fear of missing out on a good rate.

If you’re still looking for a competitive 4-year fixed rate, there is still a range of homeowner options available, including:

Note: Data is correct at time of writing (09/08/2021)

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Variable mortgage rates starting with a “1”

As fixed rate home loans continue to rise, mortgage lenders are starting to wage war on new customers by reducing their variable mortgage rates. Recently, the large Westpac bank lowered its introductory variable rate to 1.99% while increasing its fixed rates to 4 and 5 years.

In fact, RateCity’s research found that the number of variable rates below 2% has dropped from 18 to 46 in the past two months alone. This is an increase of 68%, despite the cash rate which has remained unchanged since November 2020.

If you’re hoping to get a variable interest rate starting with 1, here are some of the lowest homeowner variable rate loans that pay principal and interest:

Note: Data is correct at time of writing (09/08/2021)

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Go with low-rate auto loans

Despite millions of Australians stranded or banned from exposure due to the latest COVID-19 regulations, the number of vehicles sold in August rose 33% year-on-year, according to the latest data from the Federal Chamber of Automotive Industries ( FCAI).

A total of 81,199 new vehicles were purchased in August 2021, with Queensland, Western Australia and the Northern Territory all registering more than 30% growth from August 2020. Even new vehicle sales of The Victorian era rebounded from last year, with an increase of over 150%. Understandably though, ACT and New South Wales both saw declines in new vehicle sales.

If you’re one of the many Australians who are hoping to get out of lockdown with a new set of wheels or step up and travel locally in unrestricted state, it may be worth comparing your new car loan options. There are a range of new car lenders in the market offering new vehicle finance rates as low as 2.85%

Note: Data is correct at time of writing (09/08/2021)

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Live Debt Free in 2021

The impacts of the foreclosure on some Australian finances have not been so bad, with national interest-accumulating credit card debt reduced to its lowest level since February 2004.

The latest RBA figures revealed that the interest-accumulating debt on personal credit cards now stands at $ 18.90 billion, of which more than a billion was written off between June and July alone. This is the biggest monthly drop since July 2020, when Australian cities left the nationwide lockdown.

While millions of Australians stuck at home would rather not be confined, paying off your credit card debt can help take the pressure off of some financial stress. If you can budget for it, it may be worth considering whether a balance transfer credit card with a healthy interest-free period can help you get rid of your credit card debt for good.

Keep in mind that any additional purchases you make with a balance transfer credit card can immediately start earning interest, so it’s best to consider locking the card in while paying off your debt. Also, once this interest-free period is over, the card will revert to a higher continuous purchase rate, so make sure you have budgeted to pay off your debt in full during said balance transfer period.

Here are some balance transfer offers with the longest interest-free periods:

Note: Data is correct at time of writing (09/08/2021)

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