News Archive for April 2021

While it can be unpleasant to think about, planning ahead in case you become ill, are unable to work, or pass away unexpectedly is a common way to ensure the financial security of your family and loved ones. Life insurance can help you prepare financially for the unexpected.

Share trading has exploded in popularity in recent years, particularly among younger Australians who are looking for ways to grow their wealth beyond the conventional means.

After a tough year, many small businesses are looking to transition out of survival mode and begin growing their operations again. In times of economic uncertainty, managing the ups and downs of your business’ cashflow can be made easier with the right banking products under your belt.Whether it’s a business loan to help fund ‘big ticket’ purchases such as stock or new equipment, a credit card to cover smaller cashflow shortages, or a bank account to keep track of all your business transactions, you’ll have plenty of attractive offers to sift through.So to help you shop around, here are our editorial picks for top business loans, bank accounts and credit cards available to Australian businesses right now. Read on for a snapshot of their key features.

The Reserve Bank of Australia and the Australian Prudential Regulation Authority have been given a combined grade of D minus for their environmental policies, in a new report from Positive Money.

Life is full of unexpected moments. So, if you have family or other loved ones who depend on you financially, what would happen if you suddenly couldn’t provide for them anymore?

From Afterpay to Zip and every Buy Now Pay Later (BNPL) company in between, it seems Aussie shoppers can't get enough of splitting up purchases. In fact, research from RFIGlobal has found that some 40% of Australians are regular BNPL users.

The Finance Burrito is available to download every week on:

Life insurance and its often confounding intricacies isn't usually casual conversation fodder. But it's also very necessary for a number of Australians, especially for those who contribute to supporting their family financially.

The new financial year right is around the corner (Yikes! Where’d the time go?), which means it's time for EOFY car sales!

Love rewards points? If you’re on the market for a new rewards credit card, a bonus points offer might be exactly what you need to scratch your points-loving itch. So which credit cards come with bonus points?  Well, last month six credit card launched fresh bonus points offers to new card members.

The past year has seen currencies and foreign exchange (FX) rates in a real state of flux as COVID-19 rocked the global economy. The Australian dollar was a perfect example of this, plunging to just 55 US cents back in March 2020 when the pandemic was declared before rebounding to highs of 70 US cents in June. Today the AUD is trading at around 77 US cents - a slight decline from its multi-year peak of 79 US cents two months ago. According to international money transfer (IMT) provider TorFX’s managing director, Nigel Fox, exchange rates will likely remain volatile for the rest of 2021. “While the world looks to be in far better shape now than it was 12 months ago thanks to the rollout of vaccination programs … there can be no doubt that some of last year’s uncertainty has bled through to 2021,” he said. “This is even before we consider the ongoing uncertainty surrounding Brexit in the UK, a new administration in the US, and the risks posed by an increasingly aggressive approach to foreign policy by China.” Fox said that for Australian businesses with international interests, whether it’s staff or suppliers overseas, this volatility could have a real impact on profit margin. “Businesses will need to tread carefully and take steps to ensure they aren’t caught out by sudden shifts in the currency market,” he said.

There’s a common conundrum for many first time home buyers in Australia: save up for a 20% home loan deposit or purchase sooner with the added cost of lenders mortgage insurance (LMI).

So you’re personalising your ride with eye-catching number plates and have the perfect customised set picked out. The only problem? You’re not sure how this foray into individuality will affect your car insurance.

RACQ Insurance has warned Queenslanders to lock up their homes ahead of the state’s second long weekend this coming Monday.

At a time when many small businesses are finding it difficult to get approved for finance, the federal government has stepped in with its SME Loan Guarantee Scheme to cut through some of the red tape.This scheme is designed to help eligible small to medium sized enterprises (SMEs) get access to cheaper funding, as it involves the government guaranteeing a portion of eligible business loans - 50% in phase two and 80% in its latest version known as the SME Recovery Loan Scheme. But to be covered by the guarantee, your lender must be approved to partake in the scheme. There are 39 lenders participating in phase two right now:

Virgin Money has expanded its banking suite after launching a brand new transaction account, two savings accounts, a banking app and a loyalty program.

Whether you’re into hotrods or sensible commuter cars, everyone can agree tyres are an essential part of all vehicles. So it is strange to think most car insurance policies don’t cover damage to your tyres and wheel rims.

Key findings from our report:

From racking up rewards points to scoring invites to VIP events, every rewards lover has their favourite perk. And if you’re into cashback deals on everyday spending, we’ve got good news for you. American Express has launched a brand new credit card, called the American Express Cashback Credit Card. With the card, customers will earn 1% cashback per $1 spent on eligible purchases, plus an additional 5% cashback per $1 spent for the first months once you’re approved (up to $200 cashback). You could also earn an extra 1.5% cashback for purchases made at participating Shop Small small businesses (offer ends 31/03/22). But that’s not all. Once you own an Amex Cashback Credit Card, you’ll be treated to a free Binge Basic subscription, a 12-month pass to the Centr fitness app, complimentary Smartphone Screen Insurance and access to Amex Entertainment Lounges, Plan It Instalments and other Amex offers. “We’re always looking for ways to ensure our products address the evolving needs of consumers,” said Vice President of Consumer Lending at American Express, Austin Huntsdale. “With Gen Z and Millennials seeking instant gratification through Cashback incentives and new ways to be savvier with their money, there was no better time for us to introduce Australia’s highest uncapped Cashback earning credit card – giving them a financial tool that benefits their lifestyles and spending habits.” Of course, you’ll also have standard rewards credit card features, like up to 55 interest-free days, refund and purchase protection insurance. However, like any rewards credit card, there are a few things to keep in mind. The Amex Cashback Credit Card has a 20.74% purchase rate and a $10 monthly fee, so you’ll want to make sure you’re paying your balance off in full every month. Wanna find out what Mozo thinks about the new American Express Cashback Credit Card? Check out our editorial review! Or if you wanna find out how the new Amex card stacks up to other deals in the market, head on over to our rewards card comparison tool or get started with the offers below.

Australians are becoming increasingly concerned with sustainability in regards to their shopping choices post-COVID, with 61% demanding more on this front from brands according to new Mastercard research.

Online bank ING and a host of customer owned banks, including Newcastle Permanent and Greater Bank, have placed at the top of the Australian charts in Forbes’ ‘World’s Best Banks’ list for 2021.

The safety rating of your vehicle will most certainly have some bearing on the insurance premium you pay. Some insurance companies may even refuse to provide cover for cars with a low rating. That said, to truly understand the significance of car safety ratings, we have to first look at what these ratings are and how vehicle safety is tested. Let's get into it.

There are so many Buy Now Pay Later platforms around these days, it would be surprising if you hadn't heard of at least one. Think Afterpay, Zip, Klarna and Payright. The question is have you come across the 'Bill Now Pay Later' concept?

Various solar rebates and schemes have helped thousands of Aussie households turn their green energy dreams into reality, and it’s helping boost renewable energy production big time. According to solar energy marketplace bidmysolar, one-fifth of Australia’s clean energy is generated from small-scale solar systems.One scheme that’s increasingly popular amongst Aussie homeowners is the federal government’s Small-scale Renewable Energy Scheme. Under this scheme, small-scale technology certificates (STC) are generated for every kilowatt of panels installed. The number of certificates produced per system depends on its geographical location, installation date and the amount of electricity generated, which can mean a rebate worth thousands of dollars. Regardless of the system’s efficiency, the rebate per panel remains the same, prompting Aussies to purchase less reliable and cheaper systems. As a result, electricity generation and consumption are disrupted. “Quality solar will pay for itself within three to four years and last for 15 to 25 years. Comparably, cheap solar often fails within 12 to 36 months and underperforms by as much as 60% annually,” founder of bidmysolar, Bernie Kelly told Mozo. “Cheap solar is undeniably expensive solar, because not only have you invested in a system that fails but you also continue to have sizable power bills and if you decide to reinvest in a new system, the output of those costs too.” Further research from bidmysolar revealed that one in six solar systems across the country developed a major fault or stopped working altogether, with cheaper models often losing more than 20% of their output capacity within just five years. “The government incentive programme for solar has created an environment for unreliable solar operators to thrive. Cheap, underperforming and failing solar has been dumped into the Australian market,” says Kelly. It’s forecasted that more than 400,000 applications for the STC’s by the Clean Energy Regulator will be made this year. To prevent more solar hiccups for the average household, Kelly shared with Mozo his top three tips for finding a top of the line solar system. “The most important issue for consumers is to never rush in, avoid all the sales hype, and know that prices do not swing wildly from day to day or month to month,” he said. “Avoid wherever possible, finance promising interest-free, no money down. Instead, talk to your bank and use their Green Loan initiatives or a fit for purpose solar loan.“Always stick to the facts, if anybody makes a statement regarding quality and performance, have them explain the position with some science attached. Question everything which is stated verbally and have a salesperson commit to writing what they have said.“Find an independent solar advisor who is not conflicted by sales commissions or benefits, like selling your personal details to multiple solar companies.” Despite its popularity, solar power remains a mystery for many Aussies, so if you’d like to learn more about how solar energy works, have a read of our handy guide.

The unemployment rate in Australia has seen another month-on-month decrease, falling 2 basis points to 5.6% in March according to the most recent Australian Bureau of Statistics (ABS) labour force data .

US-headquartered lender Square has just announced plans to expand its business loan product to Australia, in an effort to reduce the red tape around accessing additional working capital. Square’s decision to move beyond its domestic market came in light of its own research. Its survey found that more than half of Australian businesses have been negatively impacted by COVID-19 and yet only 1 in 4 business owners have accessed formal forms of finance like business loans. Meanwhile, a far larger portion of respondents - two-thirds - have relied on more private sources of funding, such as personal credit cards or borrowing from family and friends.“It’s no secret that small businesses in Australia have historically faced huge hurdles when it comes to accessing formal forms of finance,” said Square Australia’s head of industry and payments, Samina Hussain-Letch.“They’re often forced to pour over piles of paperwork, provide years of financial information, and put up personal guarantees that can be riddled with red tape.” So, what’s the solution to these barriers? That’s where Square Loans comes in.

If you’re finding yourself back riding trains and buses as 2021 rolls away from COVID restrictions, you might be looking for ways to minimise the somewhat unfamiliar cost of commuting.

A greater number of Australians holidaying at home has kept the economy up and running, with recent data from the Treasury revealing that local spending helped GDP grow by $7.5 billion over the December quarter.Treasurer Josh Frydenberg said the boost was enough to offset the impact of strict border closures, which have brought international tourism to a halt and deprived the economy of a main source of expenditure.“While there are some sectors in the economy that continue to do it tough, it is important to note that Australians typically spend more overseas than foreign tourists spend in Australia,” he said.According to ABS data, Australian tourists spent $47 billion overseas in 2019, compared to foreign tourists who spent only $23 billion on Australia’s shores.Domestic tourists also tend to spend more time and money in regional areas, while international tourists gravitate mainly towards the nation’s capitals. The uptick in domestic travel has so far been a boon for regional spots, particularly those in east coast states.RELATED: Aussies hit the shops in 2021, says CitiThe Treasurer maintains that the Australian economy is tracking better than expected, despite setbacks such as the country’s troubled vaccine rollout.“While the continued vaccine rollout is an important step in protecting Australians against the threat of the virus, the timing of the rollout is not expected to derail momentum in our economic recovery,” he said.In its latest Financial Stability Review, the Reserve Bank revealed that Australian GDP has almost returned to its pre-pandemic levels, though some parts of the economy continue to be constrained. Wage growth remains stubbornly low, but reduced opportunities for spending over 2020 coupled with the Government’s income support payments saw household disposable income increase by 5 per cent over the year.Citi Australia’s latest credit card index showed consumer spending was up 23 per cent in March. While airline spending is subdued compared with early last year, it rose by 69 per cent over the month.“Spend is now slightly higher year on year compared to 2020. This strong rebound post-COVID is a pleasant surprise that speaks to the return of consumer confidence in the Australian economy,” said Choong Yu Lum, head of credit cards at Citi Australia.

As property prices continue to surge at record rates, saving for a first home deposit has only gotten harder. New research reveals that Sydneysiders are feeling this financial strain the most, with a $100,000 deposit no longer enough to fetch them a median-priced property. According to online lender homeloans.com.au, home buyers in NSW with a 5% deposit of $100,000 may only be able to fund properties of up to $780,000. This falls a massive $115,933 short of the current median property price for Sydney. Meanwhile Victorian buyers with the same-sized deposits are estimated to be able to afford properties of up to $710,000 - just shy of Melbourne’s median price of $717,767. However, for all other capital cities, home buyers with a 5% deposit of $100,000 could comfortably buy a median-priced property in the area.

Ultra-cheap fixed rates have fuelled a rush to the property market and sent home values soaring, but a number of banks have begun increasing long-term fixed offerings, suggesting a market slowdown might be just around the corner. With the RBA’s term funding facility due to end in the second half of the year, longer term fixed rates will likely drift upwards, meaning the current interest rate environment might look a lot different in just a few months’ time.So far, the Commonwealth Bank has been the only major bank to reverse course. It lifted 4-year rates for its Fixed Rate Wealth Package by 20 basis points to 2.19% p.a. (3.73% p.a. comparison rate*), citing increased funding costs.Bank of Queensland also raised 4- and 5-year rates by 20 basis points at the same time it cut its 2-year offering. 4-year rates now sit at 2.29% p.a. (3.00% p.a. comparison rate*).Meanwhile, Teachers Mutual Bank increased 4-year rates by 19 basis points and 5-year rates by 34 basis points across its associated brands. More banks and lenders are expected to follow.Typically, only around 15% of mortgages are fixed, but the combination of rock-bottom rates and predictable payments have attracted plenty of borrowers in the past year, Right now, fixed rates account for more than one-third of new mortgages.At the time of writing, the lowest fixed rate offers among lenders we track are:

The Reserve Bank of Australia kept official interest rates at 0.1% in its April meeting this afternoon, as Australia’s economic recovery proceeds with only the occasional minor drawback.In his post-meeting statement, RBA governor Philip Lowe said current policy settings have helped prop up employment and aggregate demand, but there are still uncertainties regarding the outlook.“GDP increased by a strong 3.1% in the December quarter, boosted by a further lift in household consumption as the health situation improved. The recovery is expected to continue, with above-trend growth this year and next,” he said.“Nevertheless, wage and price pressures are subdued and are expected to remain so for some years. The economy is operating with considerable spare capacity and unemployment is still too high.”The yield on the 3-year Australian Government bonds also remained unchanged, along with the parameters of the Board’s QE program and term funding facility.“The initial $100 billion government bond purchase program is almost complete and the second $100 billion program will commence next week,” Lowe said.“Beyond this, the Bank is prepared to undertake further bond purchases if doing so would assist with progress towards the goals of full employment and inflation.”RELATED: Autumn property, how to stay ahead as the auction market heats upUltra-low interest rates have lit a fire under the residential property market, with CoreLogic’s home value index climbing 2.8% in March — the fastest rate of growth recorded in 32 years. While the RBA and regulatory bodies are alert to runaway prices, they haven’t shown much interest in stemming the tide. At a recent economic forum, APRA chair Wayne Byres said the regulator has no mandate to target housing affordability.Instead, it will be keeping a close eye on lending standards, particularly the share of high LVR and high debt-to-income loans. So far, it maintains that the rate of risky lending has not strayed from historical averages.The drop in the number of mortgage deferrals is also promising. The latest figures from APRA show that as of 28 February, only 0.5% of all loans - or $14 billion worth - was still deferred.For the RBA, a booming property market isn’t so much a problem to be contained but a necessary ingredient to fast track economic growth and deliver inflation within the 2 to 3% target range. Lowe once again ruled out an increase to the cash rate until that target has been reached, saying the labour market must first improve enough to start generating wage increases. That means variable rates will remain low for some time yet, but a different picture is emerging on the fixed rate front. Last month, a number of banks quietly increased 4- and 5-year fixed rates in response to rising funding costs.That included the Commonwealth Bank, which lifted 4-year rates on its Fixed Rate Wealth Package by 20 basis points. It now comes with 2.19% p.a. fixed rate (3.73% p.a. comparison rate*).More increases to long-term fixed rates are expected in the coming months as banks prepare for the end of the RBA’s term funding facility later this year.For more information about mortgage and lending trends, head over to our home loan statistics page. And to see where interest rates currently sit, visit our home loan comparison page.

In a bid to support small business recovery after JobKeeper, all of Australia’s big four banks have started offering low rate business loans of up to $5 million since April 1.These loans are available through the government’s new SME loan guarantee scheme, which has been expanded and extended for the second time since its introduction back in March last year. Now in its third phase, the scheme is open to the following businesses:

There’s great news for Australian borrowers and refinancers this month with a continuing downward trend in home loan interest rates driven by lenders cutting fixed home loans to all new record-breaking lows.

It’s officially April folks! Which means we’re in for an extra busy month. Lucky for you, we’ve put together a checklist of all the things you’ll need to get through April Fool’s Day, Easter, the school holidays and all the other shenanigans that April will bring.

If you’re an American Express customer and a big fan of the Shop Small campaign, we’ve got good news for you. Today the credit card giant has announced that not only is the Shop Small campaign back in business, it will now be a year-long movement. Just in case you weren’t aware, Amex’s Shop Small campaign is all about encouraging Aussies to do their bit and shop from small businesses. And given the year the country has just had, many small businesses are gearing up for a prosperous 2021. “The resilience that Australian small business operators have shown throughout the Covid crisis has been extraordinary,” said vice president of small and medium enterprises for American Express Australia, Lisa Belcher. “And it’s encouraging to see consumers, big business and government rallying to back the sector, but now is not the time for complacency,” said vice president of small and medium enterprises for American Express Australia, Lisa Belcher. “That’s why Shop Small is returning all-year-round, to remind shoppers that if they want to see these businesses survive they have to take action and spend with them regularly.” To take part in the Shop Small initiative, Amex customers will need to save the Shop Small offer to their eligible card and shop at participating online and in-store small businesses where they will earn an extra three points per dollar spent until 31 March 2022 (up to 40,000 extra points).

Despite the Reserve Bank having made no further cuts to the cash rate this year, interest rates for term deposits are still very much on a downward spiral.