Report: Banking on rate relief? You might be paying too much for your home loan

Wednesday, 3 February 2021

Banks can profit off home loan customers by postponing how quickly they pass on a Reserve Bank cash rate cut. Typically these are larger and more established banks, including the big four, and the latest Mozo research shows that delays by these lenders has seen them pocket $1.2 billion in additional home loan interest since 2011. From time to time, they’ve also responded with partial rate cuts or withheld rate relief from variable customers - if we add those instances into our calculations too, then their extra interest earnings since 2011 soar to $29.9 billion.In fact, our research found that following the official rate cut in November 2020, only 18 out of 95 lenders passed on the rate relief in full, while 15 passed on part of the cut. It’s worth crunching some quick numbers on this: at the current average variable home loan rate of 3.29%, the monthly repayment for owner occupiers paying principal and interest is $1,750. If all 95 lenders had passed on the 15 basis point cut in November in full, the new average variable rate would have been 3.19%.

Rival lenders take centre stage in the new decade

Monday, 1 February 2021

Online lenders have thrown down the gauntlet and proven themselves serious challengers to the big four banks. And this goes beyond attractive new branding.

Nab to purchase neobank 86 400 in 220 deal

NAB to purchase neobank 86 400, combine with UBank

Last updated Friday, 29 January 2021

NAB has announced plans to purchase neobank 86 400, which it will combine with its digital offshoot UBank in a bid to accelerate growth and innovation.The decision is still subject to shareholder approval, though 86 400’s team of directors have unanimously recommended that shareholders vote in favour of the scheme. “This will significantly fast-track our growth, propelling our business, customer numbers and balance sheet to a position which would’ve otherwise taken five years,” said 86 400 chief executive Robert Bell.Since launching in September 2019, 86 400 has attracted 85,000 customers and $375 million in deposits with its mobile-led platform. It also has $270 million in approved residential mortgages.NAB became a minority stakeholder in 86 400 after purchasing 18.3 per cent of shares last year. It informed the ASX on Friday morning it intends to acquire the remaining shares, which it estimates will cost approximately $220 million.86 400 chairman Anthony Thomson said the partnership with UBank will allow the neobank to “dramatically accelerate our growth and reach even more Australians with our smarter approach to banking.”“It means we’ll be able to invest even more into developing smart products, experiences and services, helping our customers own their home faster and reach their goals sooner with smarter spending and saving.”UBank CEO Philippa Watson also struck a positive tone, saying the transaction will allow the two digital players to continue to deliver innovative banking solutions to Australians.“Combining with 86 400 will bring together UBank’s established business and 86 400’s experience and technology platform to meet the changing needs of our customers,” she said.The purchase will still need to be approved by various official bodies, including the Treasurer, the Australian Prudential Regulation Authority (APRA) and the Australian Competition and Consumer Commission (ACCC). It is expected to be finalised by mid calendar year 2021. Until then, both 86 400 and UBank will continue to operate as separate businesses.

To rent or buy, how do the costs compare?

Friday, 29 January 2021

You may be at that point in your life when you’ve started to think seriously about buying a home. Maybe you’ve rented for a number of years now and you’re tired of handing over your hard earned dollars to someone else. That said, the thought of having to take out a home loan can also be quite daunting.

Home loan approvals at all-time high, says ABS

Monday, 18 January 2021

The total value of new home loan approvals jumped up 5.6 per cent in November to a record high $24 billion, according to the latest figures from the Australian Bureau of Statistics. Loan commitments for existing dwellings contributed the lion’s share of growth, increasing 5.9 per cent over the month to $12.44 billion.Meanwhile, the value of construction loan commitments rose 5.6 per cent to reach $3.01 billion. This marks an increase of 75 per cent since July last year, shortly after the Government’s HomeBuilder scheme was introduced.Housing Industry Association (HIA) economist Angela Lillicrap said the recent extension of the HomeBuilder program bodes well for buyer confidence and “will see the strength in housing finance data extend into 2021.”ABS data also shows the value of investor loan commitments increased by 6 per cent in November, however the share of investors remains low, with high vacancy rates and low rents among the main reasons investors are retreating from the market.

What are the best home loan rates in 2021?

Wednesday, 13 January 2021

Looking to buy your first apartment or switch to a cheaper home loan this year? Given how much interest rates have fallen over the past 12 months, the general consensus is that 2021 could be a great year to tick off these goals.The big question though, is what home loan rates should borrowers be looking for when shopping around? After three Reserve Bank cuts in 2020 which brought the official cash rate down by a massive 0.65%, what’s considered ‘low’ or ‘competitive’ has unsurprisingly changed a lot. As a rule of thumb, you’re likely paying too much with a rate above 3.00%, considering that a big bulk of owner occupier home loans now start with ‘2’ and some even begin with ‘1’.

Melbourne property market surges with catch-up energy

Thursday, 17 December 2020

Despite initial fears of a property price crash, Australia’s housing market has stayed in robust shape this year, with signs it’s set to grow even stronger in 2021, especially in Melbourne. The latest report from property development platform Archistar found capital city markets have rebounded across the board since the easing of COVID-19 restrictions and the standout player has been Melbourne.The city recorded the sharpest surge of all in home buyer and seller demand as it emerged from its second lockdown last month. For example, Melbourne’s weekend auction clearance rates rose from 67% to 75% in November, while its newly reported home sales soared by a whopping 70% (compared to Sydney’s 7.5%), says Archistar. Meanwhile on the pricing front, Melbourne saw a 0.7% increase over November - a considerable feat, given that only a month prior, it was the only capital city to record a drop, according to Corelogic data.

5 rival lenders taking on the big banks and winning

Saturday, 12 December 2020

Many Australians are focussing on reducing household costs right now, and saving on interest repayments by switching to a better value home is a great place to start. Since Covid-19 hit our shores, the number of Aussies refinancing their mortgage has spiked as rival lenders cut rates to woo borrowers from the major banks, with some genuinely big savings now available for those who are prepared to shop around.

Haven't switched home loans recently? The ACCC says you may be losing out on thousands

Last updated Tuesday, 8 December 2020

Fourteen months after being directed by Treasurer Josh Frydenberg to conduct an inquiry into home loan pricing, the Australian Competition and Consumer Commission (ACCC) has released its final report in which it urges Aussie homeowners to review their home loan rates to potentially save thousands of dollars.

Cash splashes to bargains: Australia’s cheapest and most expensive properties of 2020

Tuesday, 8 December 2020

What a year 2020 has been for Australia’s property market. As COVID-19 left no corner of life untouched, we saw home loan interest rates fall to new historic lows, clearance rates in many of our capital cities dip, and housing prices follow a similar downward trend. But the property market has proven surprisingly resilient. According to the latest CoreLogic figures, November is the second consecutive month that dwelling values have risen, following a pandemic-induced drop of 2.1% between April and September.CoreLogic said the recovery has been largely propped up by monetary policy and fiscal policy support, as well as growing consumer confidence and signs that the economy is bouncing back. So amid all the ups and downs, just how much have properties across Australia actually been costing homebuyers? On the one hand, some of our wealthiest made headlines for spending exorbitant amounts on houses located in Australia’s most exclusive postcodes, while on the other hand, there was a real appetite for regional and rural bargains. So to give you a snapshot of properties at both ends, we’ve compiled a list of some of the cheapest and most expensive homes that buyers snapped up over 2020:

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