As lenders with interests in many sectors especially in the ‘in-demand leisure vehicle market, at Jade Caravan Finance our team stays across both what the financial markets are doing. We also keep a close eye or ear on what is being discussed in the media around lending, finance and especially interest ra’tes. Whether it is opinion or government policy, what is being talked about by commentators and journalists can influence buyer decisions. So our interest is two-fold – so can both stay ahead of any movement and trends and so we can keep our customers abreast with current and timely information.
Recently there has been some ‘conjecture’ in some circles from some commentators about possible rises in interest rates. That we consider a very significant matter to clarify and to explain to allay any apprehension that our customers may have around their caravan loan. Both existing loans and potential finance may be considering caravan finance, camper or motor home finance.
The ‘conjecture’ we’re referring to is related to the media coverage on the surge in home prices in some areas which is seen to be driven very much by current low-interest rates. That’s the bricks and mortar style homes, not your mobile caravan homes. Some economic commentators have written pieces in the media that suggest that the Reserve Bank of Australia (RBA), in their opinion, should, will need to or even might increase the official cash rate to arrest this price surge. The talk is around an increase in interest rate would dampen demand and as such slow or halt this price surge.
Interest rates across all areas of lending are at historic low rates. If you have a home mortgage you are probably well aware of that. So what does this all mean and will it flow onto rises in the interest rates on other loans such as caravan loans?
If you’re considering buying a caravan in the near future, you could well be wondering what will happen with interest rates in the coming period. If you have an existing caravan loan, will any rate increase flow onto an increase in your repayments? We explain.
For starters, the RBA Governor, Philip Lowe, addressed these suggestions when they first emerged, saying he did not have plans to increase the official cash rate any time soon. He was looking for further improvements in key economic indicators such as employment and inflation before any rate rise would be considered. So at this point, we do not anticipate a rise in the interest rate for our Jade Caravan Finance loans.
How interest rates are set by lenders
So what is the significance of the RBA and the official cash rate? The official cash is currently sitting at 0.1% but no, that is not the lending rate on consumer loans such as caravan finance. That is the rate set by the RBA board which meets on the first Tuesday of each month (excluding January) and forms the basis for lenders to acquire their funds.
From that basis, individual lenders assess their other costs and their exposure to, interest or confidence in different markets to establish what interest rate they will charge for loans in their various business sectors.
In consumer finance, lenders are required to show an advertised interest rate and a comparison interest rate. The comparison rate will always be higher than the advertised rate as it includes some fees and charges. The comparison rate is not necessarily an ‘across the board’ rate as it is calculated based on a specific loan example. You’ll see the details of our comparison rate example where you see our rates displayed.
How Jade Achieves Cheap Interest Rates
We’ve set up a chart to show the caravan finance interest rates charged by a number of lenders for loans for caravans. Note how cheap Jade’s rate is! We achieve cheaper rates for a number of reasons, which include:-
- We are accredited with many lenders, both bank and non-bank, so we can survey a larger market to source the best on offer at any one time.
- Due to our high volume of lending, we have significant bargaining power with many lenders. The power which we utilise to negotiate rates down to the cheapest levels.
- We have committed to a business model and an approach to lending based on achieving better interest rates across our lending sectors.
Compare Lenders and Rates
When considering the different interest rates on caravan loans available in the market, it might appear like only a small percentage difference from one lender to another in some cases. So many buyers might think “what’s all the fuss about, it’s only a small amount?” To see what all the Jade fuss with cheap interest rates is all about we suggest you head to our caravan finance calculator or lender comparison calculator.
The difference will of course depend on the amount of your loan and the loan term. Caravans, campers and mobile homes can vary significantly in pricing. From budget models in the sub $50,000 range to well over $200,000 for some of the top of the range motorhomes.
On the lender comparison calculator, enter your loan amount and the loan term you’re seeking. We’ve formatted this resource to auto-calculate the repayment estimate for each of the lenders we have listed. Note the different repayment amounts. It can be a sizeable difference each month over the term of your loan.
So, in summing up, despite conjecture and opinions being expressed in some areas of the financial media, we don’t expect interest rates on our caravan loans to increase in the near future. Having said that, sourcing the cheapest rate is a major factor in ensuring you achieve the cheapest repayments.
To discuss your requirements, contact us on 1300 000 003
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.