You’d be wrong.

This week we launched a business banking section on Mozo – detailing all the business loans, business credit cards and business bank accounts on offer. And we’ve been surprised to discover that of the Big Four banks only ANZ offers an online business package that rolls various products into one deal – and one monthly fee of $32 + GST. This gets you a transaction account and a range of extras such as a savings account, payment account, credit card and merchant services.

The catch is that other fees and charges may apply – for example, on terminal rental, which still attracts half the usual monthly rental fee. So by paying “one simple monthly package fee” you don’t necessarily avoid a slew of complicated monthly fees.

Westpac is happy enough to bundle services under its “Business Foundations” package, which marries a transaction account with two additional products and saves you “up to $1,100”. But again, you’re looking at a variety of different fees and charges – and you’ll have to choose between credit cards, a savings account and a business loan.

The catch this time round is that your potential discount of $1,100 is made up of savings such as “a 25% discount off Financial Management Workshop 101” – worth $225. Another way of looking at this is an additional cost of $665 for said workshop.

Commonwealth Bank and NAB offer all the same individual products, and a similarly complicated set of calculations to figure out which bank has the most competitive package overall. And challenger brands – such as Bankwest business accounts or the St George BizPack – make it equally difficult to estimate the total cost of running a few perfectly standard accounts.

It’s the same old bank game of burying fees in incomprehensibility. But stay tuned: Mozo is set to unpick the fine print to find out which banks have the best business deals.

Do you have a business banking question? Ask the gurus on Mozo Answers, our super new Q&A forum.

Let me set the scene. It’s just another sunny, Summer day when suddenly ATMs all over Sydney and Melbourne start spouting free money. A tech glitch has allowed Commonwealth Bank customers to significantly over-withdraw their accounts at Commonwealth ATMs. The glitch was fixed within a few hours, but in that time hundreds had profited from this fortuitous malfunction.

What does the bank that is “determined to be different” do?

For starters, Commonwealth issued a forceful statement, making it sound as though Sydney had all of a sudden morphed into a scene reminiscent of German hyperinflation post WW1, with hordes of desperate punters strolling around Sydney with cash-filled wheelbarrows in tow; “Commonwealth Bank ATMs were not issuing free cash – some customers deliberately and systematically set out to withdraw money that wasn’t theirs.”

The reality is that whilst there were ‘opportunists’ (who really think they can get away with over-withdrawing their own account in front of an ATM security camera?) who knowingly attempted to rip off Commbank, a significant portion of people affected seem to be misguided Commonwealth Bank customers unaware they were committing a crime.

Commbank has since come after them with real gusto. Letters were sent out to affected customers, asking them to make lump sum payments in a very short space of time and threatening them with court action. The ABC reportedly saw a letter to a welfare recipient threatening court action unless a debt of more than $700 was paid within 10 days.

What the Commonwealth seems to be forgetting is that these people aren’t just random street hoodlums – these people are their customers. You’d think in the current era of fierce banking competition (not to mention their current ad campaign) that would count for something. Is taking customers, some of whom are pensioners and welfare recipients, to court a good look for the Commonwealth Bank?

Either way, Ralph Norris and co. seem hellbent on getting the money back ASAP. In my opinion, if Commbank really are determined to be different, they need to reassess their approach. Does the recovery of a few thousand dollars now as opposed to over a few months outweigh the damage to the brand’s image?

That being said, maybe they have succeeded in being different after all. I mean, only Commonwealth could manage to come out of this whole mess looking like the bad guys even though they’re the original victims!

UBank’s UHomeLoan for Refinancing
The one that started it all was UBank with its UHomeloan for refinancing.  For those unaware of UBank’s pedigree, it’s backed by NAB and has already set the bar in the online savings account category with it’s USaver account. The question now on everyone’s lips is: can they succeed in the home loan category too?

So far the signs are good.

The initial variable rate is a low 6.99%, but after three years they offer a loyalty discount of 0.1%, taking the rate down to an amazing 6.89%. Take into account the lack of any upfront or ongoing fees and that leaves you with a knockout comparison rate of 6.92%.

There are products offered by mutuals and non-bank lenders with marginally better comparison rates, but most of those are either basic or packaged loans and don’t offer the security of being backed by an institution as big as NAB.

Additionally, the UHomeloan has no exit or transaction fees whatsoever, unlimited free redraw and the option to split as well.

There are some negatives:
- It’s all web-based, so those conditioned to bricks and mortar may be put off.
- No offset account.
- Eligibility criteria. The loan is for refinancing only and there is a maximum LVR (loan to value ratio) of 80%. It’s also unavailable if you’re self-employed.

Nonetheless, if you do fit the bill, it’s a cracking offering and one sure to garner a lot of interest in the coming months.

Commonwealth Bank No Fee Variable Rate Home Loan
A few days after the UHomeLoan launched, Commonwealth Bank unveiled its No Fee Variable Home Loan. So how does it stack up?

The rate is 7.24%, which is good, but not market-leading by any stretch. That being said, it’s still very competitive amongst the other ‘Big 4’ offerings. There are no fees and you get branch access as well as free redraw via branch and Netbank.

And for the negatives:
- There’s no option to split the loan and no card access though there is free redraw via branch and Netbank.
- The loan has a maximum LVR of 80% (if you want to avoid extra charges).

The biggest issue for Commonwealth is that the loan is currently only available to new customers. Existing customers wanting to refinance into this loan will have to wait until April 4, 2011. Surely a kick in the teeth to some of its already disgruntled clientele?

It may not hit the heights scaled by UBank, but for a Big 4 Bank, Commonwealth’s No Fee Variable rate Home Loan is a solid and reasonably attractive offering.

Mortgage House No Fee Home Loan
Mortgage House are part of the wave of non-bank specialist lenders who typically offer great value, and its new No Fee Home Loan is no exception.

The loan has a low variable rate of 7.14% (if your LVR is less than 60%) and 7.19% if between 65% and 75%. There are better priced variable loans on the market so you should compare your options but like the other two loans, there are no upfront, ongoing, transaction or exit fees and it also comes with the option to split and unlimited free redraw.

As for the minuses:

- No branch access
- No offset account
- Not available if your LVR is over 75%

So, if you’re ineligible for UBank’s loan (if you’re not refinancing for example), then this a loan that definitely warrants consideration.

Compare home loans at mozo or ask a home loan question on our new money forum, Mozo Answers!

On face value, it seems like a smart decision from NAB. Attempting to shed the image shared by the ‘Big Four’ could only help it’s stuttering financial performance and doing so by shedding fees and lowering rates is also a great step. However, could this move backfire in the long term?

By breaking up with their illustrious rivals, NAB’s losing its one key positive attributes – being better than the rest of the Big Four. Amongst their former brethren, over the past 18 months NAB had managed to position itself as the cheaper alternative with lower rates and less fees. Now having ‘broken up’, it opens them up to greater comparison with challenger brands, the likes of ING Direct, Aussie and RaboDirect, who have been doing this for a long time anyway. And this comparison isn’t pretty reading, particularly when looking along at the home loan battleground where the bulk of this banking war is being fought.

For example, NAB may have the lowest rate standard variable home loan out of the Big Four, but compare it to the rest of the market and they rank a lowly 36th out of the 58 different providers’ standard variable loans we have on our site. If you go on to take upfront and ongoing fees into account by sorting by comparison rate, they sink even further, plunging to 43rd on our list – though still above Commonwealth, Westpac and ANZ I might add.

Which leads to the wider problem with NAB’s strategy. I applaud its moves to cut fees and interest costs and I enjoy the fact that it’s trying to reignite competition in the consumer banking marketplace. The problem is, if everyone starts surveying their options and voting with their feet, will NAB be the winner? Who says an irate Commonwealth Bank customer is going to land up on NAB’s door when they can go a bit further down the road and get an even cheaper home loan? Moreover, what’s to stop NAB’s customers doing the same? Mutuals and Non-bank lenders on average still have far lower rates and fees.

If everyone starts looking for the best deal, NAB’s got a battle it can’t win. Not yet anyway. Breaking up may be hard to do, but only time will tell if it was the right thing to do.

Compare home loans at Mozo.

CHOICE singled out the Commonwealth Bank for its shonkiness in how the points are calculated for cards linked to the Qantas Frequent Flyer program. Unlike other rewards credit cards where one rewards point equals one Qantas Frequent Flyer Point, with the Commonwealth Bank card you only earn points at half the rate. It means you have to spend double the amount of money to earn the rewards.

The Shonkys, reminded us here at Mozo HQ of just how important the Rewards Revealer is, and so we decided to take this opportunity to take a look (and highlight) some other shoddy practices and unrewarding rewards programs.

Based on a $12,000 annual spend the three worst performing rewards cards are:

(excluding platinum cards)

Rewarding? Maybe for the banks but certainly not us consumers.

With the NAB Gold Card to earn you a flight from Sydney to London you’d need to spend a mind blowing $937,500 and that’s not the biggest catch. Points expire after 36 months, so unless you are planning on buying a house on your credit card, it’s virtually impossible to accrue enough points to redeem the flight before they expire.

But even more telling is that it’s not just a handful of rewards credit cards that will put you in the red. Of the 71 standard rewards cards in the market, 35 will cost you more than they return in rewards value each year (at $12,000 annual spend after the annual fee).

So, what can you do to ensure you get value from your rewards card? Here are our top tips:

1.    Make sure you are earning more in rewards than you are paying in annual fees
2.    Always pay off your card in full each month to avoid high interest rates
3.    If you have a credit card debt, switch to a low rate card instead

Compare rewards credit cards at mozo.com.au

My answer, as from an hour ago, is clearly yes…

The reason is that the Commonwealth Bank has just put its standard variable home loan rate UP! The NAB has said that rates are under review, and the other big banks are no doubt doing the same. This means that regardless of whether the RBA keeps cutting rates or not, the banks are clearly signalling that they are done with cutting theirs.

I also think that we are at, or very near, the bottom of the Reserve Bank rate cutting cycle anyway. There is light at the end of the economic doom and gloom tunnel, our resources driven economy continues to show signs of strength, our government continues to announce spending plans, and there is renewed optimism. All this points to a recovery of business activity and growth. In fact we are seeing it as well, with things like advertising rates going up in the last month with our own advertising. All this growth reemerging means the RBA can stop the rate cutting, probably now but perhaps a small additional cut or two at most.

Even before CBA’s move today, the banks have stopped passing on rate cuts. The last RBA cut was a Claytons rate cut, because the banks didn’t pass it on anyway (well only 40% of it to be precise). It was a clear message, they’re done going down. CBA’s move today is simply a continuation of that message.

It is also worth considering that picking the exact bottom isn’t necessary anyway if you take a long term view. Even if there is a little further to go (and if there is we can only be talking small drops, we’re already at the lowest rate level ever), over a long term view we’re so close to the bottom that long term decision making should be rewarded.

So all that says to me that it is a good time to lock in a fixed home loan rate while we’re at or near the bottom of the rate cycle. If you lock in a fixed rate for say 5 years, it’s hard to see how that won’t be a lower rate in 2014 than the variable rate will be by then. In all likelihood we’ll be back in booming economic times and the rate cycle will be up already or on the way. A decision you make today could lead to a pleasant experience reading your home loan statement in 5 years!

In fact I happened to see an email newsletter from March 2008, just over a year ago, and it advertised the My Rate Home Loan at 8.44%. My Rate Home Loans are now at 4.99%. If rates can come down that fast in a year, then think how much they could move up over the next 5 years.

And locking in a fixed rate today can get you rates well below this March 2008 level. For example with RAMS Home Loans you could get a 3 year fixed rate at 5.89% and a 5 year fixed rate at 6.49%. To lock in that sort of rate for that sort of time seems nothing but sensible to me.

Fix now before the banks move their fixed rates up. This is inevitable now in my mind, as they try to quickly adjust. Be savvy and move before they do.

So fix away and sleep well. Over the long term it will be a winning decision.

Compare fixed rate home loans with Mozo.com.au