Changes in advertised rates over the past year

Canstar unveils the perplexing case of how advertised rates for business loans have both increased and decreased in 2016.

Advertised rates for business loans have shifted over the past 12 months – mostly reducing their rates, but some increasing their rates. Since the only change in official cash rate has been in May this year we know that any change has been instituted by the lenders themselves.

While we can’t read the minds of the lenders who have changed their rates, we can certainly examine the current trends in rates movements.

 

What are rates doing?

Canstar has analysed business term loan and overdraft accounts on its database, comparing the advertised rates as at March 2015 and March 2016.

Based on this analysis, we can see a few trends in the market. Rates are based on a loan amount of $500,000 for term loans and $125,000 for overdrafts.

Residentially Secured Term Loans

Of 28 residentially secured term loans, 21 have reduced their rates. In fact, 19 products have moved by 20 basis points or more.

In contrast, there are 7 products which increased their interest rates by more than 20 basis points.

Commercially Secured Term Loans

Of 28 commercially secured term loans, 22 reduced their rates by 20 basis points or more.

The other 6 products have increased their rate by 20 basis points or more.

Residentially Secured Overdrafts

Of 23 residentially secured business overdrafts, 15 reduced their rates, 13 of those products reduced it by 20 basis points or more.

The other 8 products have increased the rate by 20 basis points or more.

Commercially Secured Overdrafts

Of 23 commercially secured business overdrafts, 12 reduced their rates. 11 products reduced their rates by 20 basis points or more.

The other 11 products have increased their interest rates by 25 basis points or more.

Canstar’s 2016 star ratings for business loans and business overdrafts shows the results of our research and ratings for 90 products available to Australian business owners. So there are plenty of options to choose from if you don’t like the advertised rates on offer from your current banking institution.

Compare business loans and business overdrafts on our website to see which business loan products would provide 5-star rated outstanding value for your business needs.

 

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