Expert predictions for banking 2020: RBA cuts to neobank home loans

By Katherine O'Chee · · 4 min read
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From the fall of credit cards to the rise of neobanks, 2020 promises a year of exciting new developments in the banking world. 

According to Mozo experts, many Australians are changing the way they interact with money - moving away from ATMs and the physical wallet, towards smartphones and open banking to manage their finances. 

So to kick off 2020, we’ve peeked into the crystal ball and predicted some of the top financial trends of the new year worth keeping an eye on: 

Bye bye branches and ATMs 

With big bank profits plummeting in the wake of the Royal Banking Commission last year, banks have been finding new ways to cut back on costs. From physical branches closing down, to more and more ATMs disappearing off the streets, it seems that many banks have pulled back on their efforts to meet the needs of customers who use cash, particularly as a shrinking number of Australians rely on this payment method. 

According to APRA’s ‘Points of Presence’ report, the number of bank branches in major Australian cities has dropped by about 9% in just two years. In 2019 alone, the Commonwealth Bank shut down nearly 100 branches, while Westpac removed 375 ATMs from convenient locations. These trends are expected to continue across the board this year, with options for cash withdrawal and face-to-face customer service set to become even more limited. 

Cashless and cardless the new way to pay

But it’s not only cash that we are bidding farewell to - fewer Australians will carry a piece of plastic in their wallets as the paltry return on credit card rewards and low consumer confidence leaves many focused more on ditching debt than on spending. The wide acceptance of debit cards and an explosion of new digital payment platforms like Buy Now Pay Later will also cause credit cards to lose some of their sheen. 

Meanwhile, with the growing popularity of tap-and-go and cardless payment options (including Apple Pay, Samsung Pay and Google Pay), smartphones could be a major contender for the most popular way to pay in 2020. 

Crackdown on Buy Now Pay Later 

Speaking of Buy Now Pay Later, as many as 30% of Australian adults now have one or two BNPL accounts - that’s roughly 5.8 million users nationally. But the payment platform still isn’t subject to any regulations, like the National Credit Act and Code, that require BNPL providers to meet responsible lending obligations. 

This may change in 2020, with our experts predicting that ASIC may step in and tighten the rules around Buy Now Pay Later - whether that’s regulating fees or ordering providers to perform more extensive credit checks before approving users. This could mean a tougher application process and stricter spending limits for consumers. 

Hello neobanks 

Besides Buy Now Pay Later, neobanks also left a big imprint on the financial world last year - and they’ll continue to do so in 2020, ruffling the feathers of the big four banks. In fact, recent Mozo research revealed 1 in 4 Australians, or around 4.9 million customers, have switched or seriously considered switching from one of the big four to a neobank. 

In 2019, 86 400 became the first neobank to offer home loans to Australian customers, boasting application approval speeds that are six times faster than securing a mortgage with the big four. More and more neobanks may follow in 86 400’s footsteps and launch a whole suite of products for consumers, from savings accounts to home loans. 

A one-stop shop for all your finances 

Thanks to the introduction of open banking in Australia, consumers could soon have more complete access to their data and the right to share that data with other banks, institutions and fintechs. For instance, an ANZ customer who has a savings account with HSBC and a home loan with NAB could elect to have all of their information in one place - say, on their ANZ banking app - providing them with a clearer big-picture view of all their banking activities. 

Open banking promises to put control into the hands of customers. More specifically, it would reduce the pain and hassle of switching to a better deal, which would in turn boost competition in the banking sector.

RBA to keep cutting, cutting, cutting

Taking a more sweeping look at the economy, the Reserve Bank will continue to be busy in 2020, with two potential cash rate cuts in the pipeline - one in February and the other mid-year. 

These predicted cuts will be part of the RBA’s efforts to keep the economy afloat as higher costs of living, slowing wage growth and rising unemployment figures continue to put a strain on consumer confidence and spending. 

Fairer home loan rates for all

With three 0.25% RBA cuts last year causing lenders to drop their home loan interest rates left, right and centre, it’s become even more apparent that existing mortgage customers aren’t always offered the same great rates as new borrowers - so they end up paying a lot more for their home loan. In 2020, an inquiry from the ACCC could help to get rid of this inequality. 

And if you want to weigh up your home loan offer against the rates snatched up by other customers in the same area with similar loan amounts, 2020 could also be the year when you’ll have access to rate benchmarking through a government comparison site. 

Interested in switching to a better deal today? Check out these refinance home loans below, or head over to our home loans comparison table to compare even more options

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 30 October 2024 Important disclosures and comparison rate warning*

Refinance home loan comparisons on Mozo

Promoted

  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $2,852
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.59 % p.a.
    Fixed 5 years
    Comparison rate
    6.27 % p.a.
    Initial monthly repayment
    $2,867

    Get repayment certainty with HSBC’s low 2 Year Fixed Rate Home Loan. Make up to $10,000 of extra repayments a year. The option to split your home loan between fixed and variable. Plus, score $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 28 February 2023 and settle by 30 April 2023.

  • Fixed Rate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    5.74 % p.a.
    Fixed 3 years
    Comparison rate
    6.81 % p.a.
    Initial monthly repayment
    $2,915

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

  • Variable Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.98 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,991
    Go to site

    Competitive variable rate on up to a 30 year loan term. No application fees to pay. Unlimited additional repayments. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Discounted Home Value Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.99 % p.a.
    Initial monthly repayment
    $2,995

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Receive $3,288 cashback when you refinance an existing home loan. Minimum loan amount of $250,000, settle within 120 days from applying.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.22 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Mortgage Simplifier

    • LVR<80%
    • Owner Occupier
    • Principal & Interest
    Interest rate
    6.14 % p.a.
    Variable
    Comparison rate
    6.17 % p.a.
    Initial monthly repayment
    $3,043

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

    • Owner Occupier
    • Principal & Interest
    • <80% LVR
    Interest rate
    6.18 % p.a.
    Variable
    Comparison rate
    6.18 % p.a.
    Initial monthly repayment
    $3,056

    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.