The bottom line: Now a car loan comes capped

Reported by Effie Zahos
Wednesday, February 1, 2012
CBA boss sells Paddington home for $3 millionBanking chief, whose salary increased to $8.1 million last year, made a tidy profit on the Victorian terrace.
By Effie Zahos

Money magazine, February edition

Once only available on home loans the idea of “capping” a rate is now, thanks to QTMB, available on car loans. Previously known as Queensland Teachers Credit Union, QTMB recently launched a new car capped variable rate loan.

If interest rates rise the car loan would remain at the variable rate you initially signed up for, currently 8.99%. But if on the other hand rates drop, your rate drops too. When compared to what the big four are currently offering – NAB’s variable rate is 14.99% while the Commonwealth’s fixed new car loan is 10.99% – it’s a good deal. And given most people take out a car loan over a three to five-year period a “capped” feature is very reassuring even if we do see a few more rate cuts.

In addition to no monthly account-keeping fees the loan offers repayment flexibility. However an application fee of $125 does apply.

According to QTMB’s chief executive officer Mike Murphy, consumers can expect to see more innovative products such as this one. Given they were the first financial institution in Australia to introduce the Rate Tracker home loan that guarantees changes in interest rates stay consistent with the official changes made by the Reserve Bank of Australia, Money looks forward to this mutual pushing the bigger lenders into more innovative products.


This car loan is cheaper than the big four offer for new car loans, but compared with other credit unions or building societies it’s not the cheapest. The big plus of course is that unlike those other car loans, QTMB’s is capped. Let’s just hope interest rates go up so you feel better about taking on a small premium. It is a great competitive product that will really shine in a rising interest rate market.

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28/03/2015 12:43Sydney, Australia. 28 March,2015