Home mortgage holders will be well aware of the current situation with interest rates. Many would have seen their home loan rate drop significantly in the past 2 years as banks and other lenders responded to the RBA’s decisions to cut rates. This was done in a number of times in 2020 as the COVID-19 situation impacted the Australian economy. The cuts in the official cash rate followed through to many lending sectors including to caravan loan interest rates.
With historic low rates now prevailing, media, adverts and commentary by finance analysts are urging people to fix their rates, to lock-in their rates and to search for better rates. Such comments relate primarily to home mortgages.
Interest rates differ in both the amount and how they are applied to caravan finance as compared with home loans. For buyers of RVs and all types of caravans there are many advantages to securing fixed caravan loan interest rates when sourcing their finance.
General Interest Rate Overview
The RBA has held the official cash rate at the historic 0.1% low level since November 2020. The RBA Board meets each month to make their decision in regard to holding, increasing or cutting rates. Throughout 2021 the RBA consistently stated that it was awaiting the economic conditions of 2-3% sustained inflation plus lower unemployment levels before increasing the rate.
The low rate scenario caused an uptick of sales in the housing market and a resultant surge in prices. As a result, many analysts were calling on the RBA to increase the cash rate to cool the market. The RBA resisted these calls and has held the rate steady.
Prior to the emergence of Omicron the economy was bouncing back well from Delta and both inflation and unemployment figures were improving. The February meeting of the RBA Board will be the first since December 2021 and the first since the Omicron variant has taken hold.
It will be interesting to see how these factors play out with the RBA’s rate decision and in the comments made accompanying that statement.
Despite the official rate being kept on hold, some home loan lenders have already moved to increase their rates.
Caravan Finance Rate Options
Loans to purchase caravans are available through a number of lenders. The type of loan and the specifications of the loan can vary markedly across the market. Some caravan loans include a variable interest rate and some, such as the Secured Caravan Loan offered by Jade, have a fixed interest rate.
Our Secured Caravan Loan is widely used for new RVs of all types – conventional caravans, off-road, semi-off road, camper trailers, camper vans, toy haulers, mobile homes and hybrids.
In situations where the van is not suitable for or accepted as loan security, our consultants can source a quote for an Unsecured Personal Loan for our customers. Unsecured Loans can be sourced at a fixed or a variable rate.
Why Fixed Rate Caravan Finance is Desirable
A fixed interest rate for a caravan loan is applied differently from a fixed rate home loan. So if you are familiar with the home mortgage market but have not previously applied for a caravan loan, this is worth noting.
Fixed interest rates on caravan loans are actually fixed at the rate agreed at the time of application for the full term of the caravan finance. This is not usually the case with home loans.
There are many advantages to securing a caravan loan with a fixed interest rate:-
- The fixed rate on a caravan loan remains unchanged over the full term of the loan. By securing a caravan loan in the current historic low rate environment, buyers can enjoy that low rate for all the years of their loan term. Even when the RBA increases the cash rate, the rate on a fixed rate caravan loan would remain unchanged.
- The fixed rate along with the fixed term deliver a fixed monthly caravan loan repayment. This provides welcome certainty to many buyers. Those planning to travel for extended periods need not worry about changing rates and changing repayments. Those planning other purchases in coming times can do so with greater clarity around their financial commitments.
- Planning household budgets and expenditures is streamlined with the knowledge that the caravan loan monthly commitment will remain steady.
Achieving a Fixed Rate and Lowest Rate
Securing a caravan loan with a fixed interest rate presents many advantages. But securing that fixed interest rate at the cheapest rate possible is even more desirable. We’ve compiled a list of banks and lenders which sets out their current loans and corresponding caravan finance rates for caravan finance. This provides a quick and easy reference to the lowest rated loans on the market.
When considering interest rates, note that unless otherwise indicated, advertised interest rates are for new caravans and usually for applicants with a good credit score. To ensure they receive the lowest rate loan offered, applicants can address issues with their credit profile prior to submitting a loan application.
Lending rates are currently extremely attractive and securing fixed interest rate caravan finance at our cheap rates presents many advantages for those aspiring to the caravan lifestyle.
Call Jade Caravan Finance on 1300 000 003 for quote on a fixed interest rate caravan loan.
DISCLAIMER: THE DETAILS AND INFORMATION IN THIS CONTENT ARE PREPARED AND PRESENTED PURELY FOR INFORMATION AND NOT INTENDED IN ANY WAY AS THE SOLE SOURCE OF FINANCIAL ADVICE FOR CARAVAN PURCHASING. IF ADDITIONAL FINANCIAL ADVICE IS REQUIRED, READERS SHOULD REFER TO A FINANCIAL ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY ERRORS, PRODUCT DESCRIPTION VARIATIONS, OR OTHER MISREPRESENTATIONS OF INFORMATION AS PRESENTED.