Mozo Money Moves: Spike in TD increases, as Aussies scramble to find $60 billion to cover their mortgage

This week, Mozo released its April edition of the Mozo Banking Roundup, which looked at the trends and rate moves across key personal finance products over the past month. 

Mozo also released new research showing Aussies are coughing up an extra $60 billion to cover their mortgages, after the 13 cash rate hikes since May 2022 drove up variable rates.  

There was also some interesting activity in personal loans this week, as Coles announced from 30 June 2024 it would no longer offer personal loans. The change comes after Macquarie announced they would no longer provide car loans, and could mean other lenders follow suit. The Mozo experts will be keeping an eye on this space.

The Mozo team has also witnessed a spike in term deposit increases in the past few days which we outlay below. 

Let’s get into it!

Home Loan Moves

This week, a few small cuts to interest rates were punctuated by some much larger chops, and we also saw a bank increase its cashback offer. 

Illawarra Credit Union cut some of its fixed investor rates by 0.05% - 0.20%, and RACQ Bank cut fixed and variable rates by 0.05 - 0.40%, depending on LVR tier and borrower type. 

A significant cut came from QBANK, which chopped 0.05 - 1.10% off its variable rates, decreasing the difference between its lowest and highest LVR tier rates. 

Greater Bank increased some of its variable discounted rates by 0.05 - 0.09%, while it decreased fixed rates by 0.10%. 

The refinance cashback offer from IMB Bank has changed from $2,000 to $4,000 and is determined by the value of a borrower’s existing home loan. 

Looking back on the past month, there was a mixture of cuts and hikes to variable rate options, and NAB made significant cuts to its Tailored Home Loan. Most of the fixed rate changes recorded in our database throughout April were cuts. 

Some notable variable rate cuts came from AMP Bank (0.10 - 0.30%), Auswide Bank (up to 0.45%), Macquarie (0.01% - 0.10%), NAB (up to 1.08%), Suncorp (0.05%), and Unity Bank (0.25%). 

On the other hand, we saw Adelaide Bank (0.15%), Credit Union SA (0.10%), and Teachers Mutual Bank (0.10%) all increase some of their variable rates.

Variable rate cuts 

We also saw fixed rate cuts throughout the last month from several lenders. 

Bank Australia, Community First, and Easy Street made 0.10% cuts to 2-year and 3-year fixed rates. Queensland Country Bank cut 0.30% from its 1 to 3-year rates. ME cut owner-occupier rates by 0.25% - 0.55% across 2 to 5-year terms but raised two of its 1-year rates by 0.05%.

Also raising rates, Bank of Queensland added 0.10% to its fixed rates for owner-occupiers, and Regional Australia Bank made some sharp increases to its Partnership Advantage package (ranging from 0.65% - 1.52%) also adding 0.07% - 0.19% to other non-package fixed rates. 

Since the beginning of 2024, despite no movement in the cash rate, the average variable home loan rate has gradually decreased. This suggests the market expects the Reserve Bank of Australia (RBA) to continue holding the cash rate at 4.35%. 

Mozo finance expert, Peter Marshall, says the RBA’s next Monetary Policy Decision is likely to be a hold – a sentiment shared with economists at the Big Four banks. 

“I don't think the RBA is going to move next week,” says Marshall. “They’ll leave the cash rate where it is and I think that they will actually leave it there as long as they can. They won’t want to increase the cash rate unless it's really necessary.” 

Finance specialist, Rachel Wastell, says these rate cuts could serve as a bargaining chip in negotiations with your current lender. “Homeowners should be checking if their lender is cutting rates for new borrowers, to give them some ammunition if they can’t refinance and want to get a better rate,” she said.  

The average owner-occupied variable rate in the Mozo database is 6.80% p.a., on 3 May 2024. For homeowners on an above-average interest rate, there are 194 owner-occupier, variable home loans in the Mozo database under 6.80% p.a. (P&I, $400k, <80% LVR). Here are five of the lowest: 

Lowest variable home loan rates 

Mozo Home Loan Insights:

• Aussies have collectively paid $60 billion more to cover their mortgage since rate hikes began in May 2022.
• Experts predict the RBA will hold the cash rate in May 2024. 
• Higher-than-expected inflation figures have prompted the Big Four to change their rate-cut forecasts, from September to November 2024. 

Savings Moves 

This week Mozo research tracked a spike in term deposit rate hikes, with Judo and Rabobank leading the charge, after an unusually quiet April. Bank of Sydney, Great Southern Bank, Goldfields Money and Teachers Mutual Bank also hiked rates, between 0.05% - 1.25%.

In the savings “at-call” space, Newcastle Permanent eased one of its bonus rate conditions on the ‘Smart Saver Account’, requiring customers to increase their savings account balance by any amount over the month, rather than $150. 

Looking back at April and the Mozo banking roundup, there were only a few savings rate changes, most of which were to base and introductory rates. 

Coastline Credit Union’s ‘Rise Online Saver’ base rate fell 0.20%, to 2.45% p.a. However, its 6-month introductory rate, at 5.10% p.a., remained unchanged. 

HSBC also cut its ‘Everyday Savings’ base rate by 0.30%, to 3.00% p.a., and left its 3-month introductory rate at 5.15% p.a. 

In better news, Credit Union SA added an extra 0.15% to its 4-month intro rate on the ‘Netsave Account’, taking it to 5.40% p.a., and Queensland Country Bank added a 5-month, 5.05% p.a. introductory bonus rate to its ‘Online Saver’ account (2.90% p.a. base rate). 

Savings Insights

• 69% of Aussies have NEVER switched savings accounts, despite switchers having higher rates and more savings on average.
• Millennials and Gen Z struggle the most to meet savings goals, but here’s how to buck the trend.
• With different interest rates, term lengths and account features on offer, how can you find the best term deposit match?

---

As a part of Mozo’s commitment to making your money count for more, each month we “roundup” the rate changes, key banking trends and money moves in the Australian personal finance market. 

If you’d like to see the analysis in full once it’s released, you can subscribe to receive the Mozo Banking RoundUp here.

---

Disclaimer: 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. Target Market Determinations can be found on the provider's website. 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.