Car Rates The Next Battleground
Sun Herald
Sunday February 25, 1996
KEEN competition in housing has finally spilt over into other loans with Endeavour Credit Union slashing its car loan rate.
The credit union is also offering the cheapest two-year home loan - 8.6 per cent until June 1998 - but it is a capped rate and so reverts to the standard variable rate, which has been reduced to 9.75pc.
This means that you are locked into the standard rate unless you pay the penalty.
Like ANZ and FAI First Mortgage, Endeavour has dropped its application fee.
The capped rate concept has been extended to car loans, with Endeavour offering a fixed rate of 9.85pc for 17 months until June 1997 when it reverts to the variable 11.75pc.
Independent researcher Cannex yesterday confirmed this is the cheapest unsecured car loan rate on offer.
It is believed to be the first time a car loan has been tied to a mortgage rate. The 11.75pc is based on a 2pc margin above the standard home loan rate of 9.75pc.
There is a low, one-off application fee of $25 and no qualifying period, Endeavour's Alex Sala said.
The banks are showing no intention of cutting their variable rates, apart from an interesting experiment by St George.
St George has lowered the rate on its no frills loan to 8.9pc and is test marketing it in Queensland. The same loan is being tested in Western Australia and South Australia at 9.25pc.
TOP 5 VARIABLE MORTGAGES
% rate True rate
Super Members Loans 8.70 8.80
FAI First Mortgage 8.80 8.93
BMC 8.85 8.99
Aussie Home Loans 8.90 9.02
Austral 8.95 9.05
Note: Ranking applies to variable rate loans only. Rates should be checked with
institutions. The true rate takes into account fees and the introductory
honeymoon rate.
Source: CANNEX
© 1996 Sun Herald
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