Mozo Money Moves: Expert Predictions for 2024 and the new RBA meeting schedule
Welcome to the first edition of Mozo Money Moves for 2024. This weekly snapshot rounds up the latest in banking and interest rate news, sharing any key banking and rate changes in personal finance.
This week, as industry restarts for a new year, rate changes have been minimal. As such, the focus this week is on 2024 predictions, the new RBA meeting dates for the year ahead, and (despite little movement in home loan rates in the festive season) the opportunity for borrowers to save $11,000 by switching to a home loan rate just 0.10% lower*.
Mozo Expert Predictions for 2024
- Mozo’s Managing Editor JP Pelosi shares 6 expert money tips for 2024 to help Australian plan their personal finances for the year ahead.
- Content and Community Director Kylie Moss wraps up the key industry and government changes for personal finance in 2024.
- RBA writer Evlin DuBose shares her insights into what’s happening with interest rates in 2024 as the RBA undertakes a new direction.
- Home Loan writer Jack Dona explains how First Home Buyers can get on the property ladder in 2024, as we reach the peak of the rate hiking cycle.
- Insurance writer Brad Buzzard dives into the home insurance trends that could shape the industry, highlighting the providers ahead of the curve.
- Buzzard also shares his predictions for how the car insurance industry could shift gears in 2024 to embrace new tech to put the consumer-first.
RBA Meeting Moves
2024 is going to be a big year for the Reserve Bank of Australia (RBA), with the launch of a new meeting calendar and format, and a continued focus on navigating the ‘narrow path’ to the 2-3% inflation target.
Instead of meeting once per month (bar December), the RBA will hold eight two-day meetings followed by a press conference on the second day at 2.30pm.
New RBA Meeting Schedule for 2024
This new schedule is more in line with major central banks, like the Bank of England in the UK and the Federal Reserve in the US, and is reflective of the RBA’s renewed focus on better communication of monetary policy and reasons behind decisions to hike, pause or cut the cash rate.
This new format is a win for Mozo moneyvators, and financial literacy advocates, and the team is excited to see it in action.
NAB is predicting one more cash rate rise, before the RBA reaches the peak of the hiking cycle, so the RBA’s first meeting of 2024 will be watched closely not only due to its new format, but the impact it has on home loan rates for 2024.
- Mozo home loan watch: when will interest rates finally come down?
- RBA Interest Rate Tracker: What do rate hikes mean for your home loan?
Home Loan Moves
It seems the banks took a break from major hikes to home loan rates in the festive season, with just a few small lenders increasing variable rates over Christmas and New Year. The fixed rate space saw even fewer changes, suggesting that banks are waiting for quarterly CPI data at the end of January (and the RBA’s first meeting in early February) before making any major money moves.
According to the Mozo database, there are currently 25 lenders offering rates starting with 5, 85 lenders offering rates starting with 6, 62 lenders offering rates starting with 7, and 39 lenders offering rates over 8% p.a.
And, while there is ample opportunity to save money by switching from a home loan starting with 7 to a home loan starting with 5, the opportunity for borrowers to save tens of thousands of dollars in interest by switching to a rate just 0.5% lower cannot be forgotten.
“As little as half a percentage point difference in home loan rates can equate to tens of thousands of dollars more in interest you’re paying over the course of the loan,” Mozo finance expert Rachel Wastell explains.
“When you look at the 0.10% difference in rates between the two lowest rate home loans on the Mozo database, you can see that 10 basis points equates to an extra eleven thousand dollars difference in interest paid over 25 years.”
“Decimal points can be deceiving in home loans. So if you can’t refinance due to serviceability, negotiating as little as a 0.10% drop in your rate with your current lender could save you tens of thousands of dollars.”
LOWEST VARIABLE HOME LOAN RATES ON THE MOZO DATABASE
|Country to Coast Variable Rate Offset Home Loan
|Northern Inland Credit Union
|Dream Value Home Loan Special Offer
|Owner Variable Home Loan
|Pacific Mortgage Group
|Standard Variable Home Loan
|The Mutual Bank
|Special Budget Home Loan
|Community First Bank
|Basic Variable Home Loan
|Variable Home Loan
|*source: mozo.com.au as at 11 Jan 2024, leading variable rates for owner occupier, principal & interest home loans at 80% LVR, $610,000 loan amount, interest paid over a 25 year loan term, at the current variable rate.
|^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.
- Money writer Evlin DuBose dives into why 2024 could be the time to switch home loans and shares predictions for home values in the year ahead.
- Jack Dona explains the pros and cons of smaller home loan lenders, for those refinancers still on the fence about leaving the big four banks.
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 Round Up here.
*Accurate as at 11 Jan 2024 according to the Mozo database, for the top two leading variable rates for owner occupier, principal & interest home loans at 80% LVR, $610,000 loan amount, interest paid over a 25 year loan term, at the current variable rate.
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