First home buyers, lender mortgage insurance, open banking: this week’s best banking news

  • ME Quarterly Property Sentiment Report: first homebuyers look to snag a bargain
  • St. George drops Lenders Mortgage Insurance for first home buyers to just $1
  • How could open banking affect your personal loan application? 
  • Mozo research finds the pandemic is the financial “wake up call” Aussies need 
  • Millennials shop around for a better rewards credit card 
  • Neobanks 86 400 and Up drop savings rates … again

All in this week’s best banking news recap: editor’s pick.

First homebuyers take advantage of property price drop, says ME 

Over 50% of first homebuyers want to jump into the property market by mid 2021, according to ME’s most recent Quarterly Property Sentiment Report. 

The stats revealed that first homebuyers are hoping to get a foot in by taking advantage of lowering property prices. In fact, it was a massive 82% that said they’d keep a look out for a bargain on a property, while only 66% of investors and 57% of owner-occupiers said the same. 

ME’s general manager of home loans, Andrew Bartolo explained that this enthusiasm from first homebuyers could be a result of a number of things. 

“First home buyers may be looking to find the silver lining in the current economic climate, thanks to greater potential for property price falls, record low interest rates and government support,” he said.

Read full article: First home buyers eager to snag bargains as property prices drop to take a deeper look into what else ME’s Quarterly Property Sentiment Report revealed. 

Bang for your buck! St. George reduced Lenders Mortgage Insurance to $1 for first homebuyers 

Ever thought Lenders Mortgage Insurance (LMI) could be the same price as a large slurpee from 7Eleven? Now it is! 

On Monday, St.George dropped LMI to just $1.00 for eligible first homebuyers with a Loan to Value Ratio (LVR) of up to 85%. This means that while generally borrowers with less than a 20% deposit have to fork out for LMI, St. George customers with a deposit of 15% won’t have to face that heavy cost. 

However, there are some conditions. In order to receive this offer you must be a first homebuyer who is taking out an owner-occupier, principal and interest loan of up to $850,000. This means the maximum home value will have to be $1,000,000.  

Read full article: St.George reduces Lenders Mortgage Insurance to just $1 for first home buyers and find out what St.George General Manager Ross Miller said about this new initiative. 

Open banking: what it means for your personal loan application 

If you’re looking for a personal loan outside of your current bank, open banking should make it easier for you to find and apply for competitive products. 

In a nutshell, open banking was introduced on 1 July of this year and is designed to give Aussie banking customers control over their data. Ultimately, it’ll be up to you which banks and lenders see your information, such as your transaction or savings account history, and when.  

Before open banking, many loans customers had to give potential lenders their banking login details. However, this was a concern for Australian consumers, says Mozo banking expert, Peter Marshall. 

He says that open banking is a more secure alternative, so that banks can review applications properly without potentially compromising customers’ login information. 

“I think the biggest benefit [of open banking] is the security issue,” Marshall says. 

“More and more lenders want to look at your bank account to see your transactions and check that you are getting paid what you say you’re getting paid, and that you don’t have any large regular expenses that you may not have mentioned on your application.”  

Read full article: Open banking and how it could affect your personal loan application to see how open banking could determine the interest rate you receive on your loan. 

Wake up Australia! Could COVID-19 be the financial awakening banking customers need? 

According to recent Mozo data, the answer is yes. And it’s all about how we think about debt. 

Pre-pandemic, 67% of Aussies saw debt as a ‘necessary part of everyday life’, but now one in four are looking to ditch debt forever. 

“Historically, Australians haven’t been afraid of debt, particularly through our love of credit cards. We’ve racked up debt with the assumption that job security and a steady paycheck is a relatively safe bet, but a global pandemic has tipped that notion on its head as unemployment soars,” said Mozo Director, Kirsty Lamont. 

“For many people, Covid19 has been a wake up call to get their finances in order and eliminating debt is a key part of that.” 

Mozo’s latest numbers reveal that 68% of Aussie households have personal debt such as a credit card, personal loan or car loan. Meanwhile, 73% of debt holders are concerned about the level their debt has reached and one in five are concerned about how to pay it back. 

Read full article: Covid-19 is the financial “wake up call” Aussies need, says Mozo for a comprehensive breakdown of Australian spending habits. 

Millennials are on the hunt for a better rewards credit card program 

According to a recent study by data analytics and consumer intelligence company, J.D. Power, Aussie Millennials are shopping around for a better rewards credit card.   

Fresh data shows that 9% of Millennial credit card customers have switched cards over the past 12 months, while 22% intend to do so over the next year - more than double of older generations. 

The truth is, almost half (48%) of Millennials are spending less on their credit cards, and 18% say their current card isn’t worth it. That’s why 29% of young credit card users are looking around for a better rewards program to increase their card’s value, while another 29% are looking for more benefits. 

Read full article: Rewards credit cards: Millennials shop around for a better program to check out what type of credit card rewards Aussie Millennials like. 

86 400 and Up cut down competitive savings rates 

This week, neobanks 86 400 and Up slashed their savings accounts rates again. 

Both the 86 400 Save Account and the Up Saver Account offered two of the most competitive rates on the Mozo database, each at 1.85%. However now these rates sit at a less attractive 1.70% (86 400) and 1.60% (Up). 

Mozo banking expert, Peter Marshall isn’t surprised by the cuts. 

“Both of these brands are neobanks, but they’re also backed by more traditional organisations: Bendigo Bank in Up’s case, and Cuscal in 86 400’s case. So to some extent they’re both going to have to deal with whatever their parent organisations are going through - they can’t be completely shielded from it,” he said. 

“It would have been nice to see them hold out from a brand building perspective, but at the end of the day they’ve got to ensure that their businesses are viable in the long term, so there’s only so much they can absorb with frontrunning on rates.”

Read full article: 86 400 and Up rates the latest casualties in savings account slump for a snapshot of some of the highest ongoing savings account rates right now. 

Need to make the switch to a more competitive savings account? Check out some hot options below!

Compare Savings Accounts 2020 - rates updated daily

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Boost Saver with Go Account

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.20% p.a. (for $0 to $250,000)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Deposit $2,000 each month and make 5 eligible payments from your Go Account. If you are between 18 and 25 deposit $1,000.

    Enjoy a savings account bundled with a spending account. New customers can earn up to 5000 bonus Virgin Money points on purchases (conditions apply). Benefit together with a joint account

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    Details
  • placeholder
    Mozo Experts Choice 2021
    Bonus Saver Account

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.20% p.a. (for $0 to $250,000)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate when at least $20 is deposited each month and five Visa Debit transactions are made each month using linked Everyday or Glide transaction accounts.

    Winner of a Mozo Experts Choice Award 2021 in the Regular Saver category. No monthly account fees and no minimum balance requirements.

    Go to site
    Details
  • placeholder
    Grow Saver

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.65% p.a. (for $0 and over)
    0.10% p.a.(for $0 and over)
    Yes up to $250,000

    Make at least 1 deposit and no more than 1 withdrawal, including internal transfers or external payments.

    Earn a maximum interest rate of 0.65% per year. Pay no monthly fees. Set up in-app savings goals. Benefit with joint account options.

    Go to site
    Details
  • placeholder
    Serious Saver

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.30% p.a. (for $0 to $1,000,000)
    0.15% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate for first 3 months, reverting to 0.15% rate after

    $0 monthly account fee. Link to any Australian bank account.

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    Details
  • placeholder
    Hero Saver

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    0.70% p.a. (for $0 to $250,001)
    0.01% p.a.(for $0 to $5,000,000)
    Yes up to $250,000

    Minimum deposit of $200 and no withdrawals in the month.

    Interest is calculated daily and paid monthly. Automatic payment feature. No minimum opening balance needed.

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    Details
  • placeholder
    Fast Track Saver Account

    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.05% p.a. (for $1 to $250,000)
    0.05% p.a.(for $1 and over)
    Yes up to $250,000

    Ongoing bonus rate applied if in the previous month $1,000 or more is credited to the linked Day2Day Plus account and 5 eligible transactions are made by the linked account.

    Earn 1.05% p.a. Bonus Interest in the following month on your Fast Track Saver Account balance. Earn Bonus Interest on your savings, with no minimum balance required.

    Go to site
    Details

^See information about the Mozo Experts Choice Savings Accounts Awards

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