RBA raises expectations of NO MORE RBA RATE CUTS
Sunday 17 November 2019
Home Loans under 3% pa and
Car loans go way under 5% pa
Expectations of another RBA rate cut in December are low according to market trading – (22 per cent expectation of a cut according to ASX Futures on Friday).
The lowest variable home loan comparison rate is now 2.7 % pa with 13 lenders with variable loan rates under 3% pa.
The leading variable home loan rates have fallen to under 3 per cent. But the RBA explained last week that RBA rate cuts are only one reason for the reduced rates:
“Most households are paying lower mortgage rates now than borrowers were paying two years ago…This reflects three factors,” said the RBA.
“First, … banks have passed through 60 basis points of the 75-basis point reduction in the cash rate to their SVRs,” said the bank in its November Statement on Monetary Policy.
Second, new variable-rate loans are typically offered at lower interest rates (30 basis points for OO, P&I), than outstanding variable-rate loans, even for borrowers with similar characteristics” estimated the RBA
Similar discounts are available for new investor and interest-only loans said the RBA.
Third, borrowers are switching from interest-only to principal-and-interest loans, which are currently set 0.20 – 0.40 per cent pa above OO, P&I variable loans said the RBA.
Variable home loans for owner-occupiers, lowest rate per lender, 17 November 2019 (P&I, OO), now listed on InfoChoice.*
“The RBA may be signalling an end to rate cuts as it assesses the impact of three cuts this year,” said Vadim Taube, from InfoChoice.
“All eyes are on the RBA governors speech next Tuesday week when he will talk about unconventional monetary policy, which is code for quantitative easing of some sort.”
“The days of stimulating the market with rate cuts that inflate the property market only may be over,” said Vadim Taube.
Car Loans crash under 5 per cent
“You would have to say it is good time to be looking for a car loan. Rates are very low and there are plenty of new lenders in the market,” said Vadim Taube, CEO of InfoChoice.
“Increasing numbers of lenders are using credit scores to set rates as well,” said Vadim Taube.
“Some new online lenders offer conditional loan approval and ID verification in minutes, then, often, if you get onto it in the morning, same-day deposit for the funds.
“And you can do it all on your phone, with just your license or passport number, address and a good comparison site,” said Vadim Taube.
NRMA has a fast, online new car loan with a comparison rate of 6.39 per cent pa.
For used cars, NRMA charges 7.70 per cent comparison ate.
Right now, online, mobile app-based lender Harmoney is offering unsecured personal loans, approved in minutes, from 7.69 per cent pa (comparison rate).
For more information on other home loan, car loan and personal loan offers and please contact:
Jason Bryce, Media Manager on 0428 777 727 [email protected]
For more comments, please contact: Vadim Taube, Chief Executive on 0403 580 794
Go straight to the latest rates information from individual banks and other institutions here.
* listed on InfoChoice’s database of 1800 home loans and 145 institutions in Australia.
InfoChoice compares financial products from 145 banks, credit unions, authorised deposit-taking institutions, non-bank lenders and other financial product providers in Australia. InfoChoice does not compare every product in the market. Some institutions may have a commercial partnership with InfoChoice. Rates are provided by partners and taken from financial institutions websites. We believe all information to be accurate on the date published. InfoChoice strives to update and keep information as accurate as possible.
The products compared in this article are chosen from a range of offers available to us and are not representative of all the products available in the market and influenced by a range of factors including interest rates, product costs and commercial and sponsorship arrangements.
InfoChoice is a leading Australian comparison website for retail banking and personal finance products. We’ve been helping Aussies find great offers on credit cards, home loans, savings accounts, term deposits, personal loans and car loans for over 25 years. Our mission is to help consumers make an informed purchasing by bringing together the most comprehensive list of financial products on the market today.
At InfoChoice, we strive to be:
• Comprehensive. We compare more than 3500 individual products from 145 providers within Australia to offer you the best value.
• Informative. We know how important it is for you to crunch the numbers before buying. Our calculators help you understand the cost of different products over the long term and show you the potential savings.