Mozo Money Moves: NAB surprises borrowers and Bankwest pulls the plug as green finance grows

With the end of the year fast approaching, the retail banking landscape is showing no signs of slowing down. This week, NAB cut its variable rates and revised its forecast, while term deposit providers continue to vie for the top spot and Bankwest stopped accepting new personal loan applications. A new green loan offering more options for eco-conscious ING mortgage holders was launched, and Mozo announced the winners of its Energy Awards, including Australia’s Best Green Electricity Provider. 

Mozo also released its latest research report around the affordability of Home and Contents Insurance in 2024, shedding light on key trends for consumers heading into a time of year when many start to review their finances and set new year savings goals.

NAB slashes variable rates, close to the value of two RBA cuts

On Thursday, NAB surprised borrowers with a 40 basis point cut to its Base Variable Home Loan Rate, dropping it to 6.44% p.a. (6.48%p.a. comparison rate*), just in time for the holiday season. This is the first cut to the rate this year, after NAB hiked it by 25 bps in November 2023.

“NAB has just handed new customers an early Christmas present, slashing its lowest variable rate just before the holiday season and jumping the gun on the RBA without forcing borrowers to go digital to save,” explains Mozo’s personal finance expert Rachel Wastell.  

“For new customers, this could mean substantial savings without sacrificing in-person service, and for existing customers, it’s a good reason to pick up the phone and call NAB to see if they can get the same rate cut before Christmas.”

This substantial, out-of-cycle cut could be NAB’s response to intensifying competition between the Big Four banks, two of which are offering low rate digital-only home loan options for borrowers. NAB’s new low rate is also being offered to borrowers with a maximum loan-to-value ratio (LVR) of 95%, so even those with a very low deposit can benefit.

“For borrowers with a $750,000 loan, NAB’s cut equates to a reduction of $189 on monthly repayments, which is a substantial sized reduction in lieu of an RBA rate cut,” says Wastell.

“In fact, when looking at the size of RBA rate cuts historically, the RBA likely would only have cut 25 basis points if they moved in November, so this is pretty close to the value of two RBA cuts.”

Among the Big Four, ANZ’s digital-only brand, ANZ Plus, offers the top rate at 6.14% p.a. (6.15%p.a. comparison rate*) Commonwealth follows close behind with its Digi Home Loan offering, with a rate of 6.15% p.a.  (6.28%p.a. comparison rate*), when looking at the lowest rates on offer across all LVRs. However, both of these Big Four Home Loans are digital-only options with no branch access, and only for refinancers. 

NAB’s Base Variable Home Loan, on the other hand, is offering a rate of 6.44% p.a. (after yesterday's 40 basis point cut) meaning it is only around 30 basis points higher than the digital-only offerings.

To compare NAB’s rates with other options, click here.

Lowest Variable Rates on offer from the Big Four Banks (All LVRs)

*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.

Jobs data prompts NAB to break rank and shift rate forecast

In another move that caught markets off guard, shortly after NAB announced it was slashing its variable rate, the bank revised its RBA cut forecast to predict the first rate cut will come in May 2025. The announcement came after the Labour Force Data showed Australia's unemployment rate held steady at 4.1%, unchanged for the third consecutive month. 

In a statement released on Thursday, NAB referred to the jobs data as a key factor in their decision. 

“The labour market has been stronger than expected and the RBA remains concerned about upside risks to inflation should gradual labour market cooling stall and capacity growth remain sluggish. 

“There are only two more employment prints and one quarterly CPI before the February 18 meeting. Given the data flow to date, it now looks unlikely the RBA will have enough confidence in the trajectory of inflation by then.”

While Commonwealth Bank, ANZ, and Westpac all predict the RBA will begin easing rates in February 2025, NAB's more cautious stance comes in response to stubborn inflation and a strong labour market. 

“While the other big banks are betting on a February rate cut, NAB is waiting to see how inflation plays out,” says Wastell. “The bank’s revised outlook suggests that inflationary pressures, especially in the services sector, are likely to persist longer than previously expected, keeping the RBA on hold for a while longer.”

NAB’s New Rate Cut Forecast:

• May 2025: First cut expected May 2025, with quarterly cuts to reach 3.10% by mid-2026.
• Peers’ Outlook: Commbank, ANZ, and Westpac continue to see a February 2025 cut, with Commbank particularly citing persistent inflation in services as the key factor.

Term Deposit Rate Leader Race Continues

Alongside competition in the home loan space, Term Deposits have also been seeing a lot of movement lately. This week ME, Bank of Queensland, Auswide Bank, Goldfields Money and BOQ Specialist all cut term deposit rates across various terms between 5-15 basis points, following the downward trend.

However, while many have been shifting rates down in anticipation of the first RBA rate cut however, there have been some banks hiking certain terms to jump to the top of the tables.

Last week, Macquarie hiked its 3 month term deposit rate, shifting it into second spot, in early November Heartland hiked to jump into the leading position for 9 month and 1 year terms, and in October, Judo Bank also made a few strategic shifts to steal top spot for 6 month and 2 year terms.

This week, AMP Bank has made a similar move, adding 20 basis points to its 4 month rate (now 4.80%p.a.), 30 basis points to its 10 month rate (now 4.90%p.a.) and 5 basis points to its 1 year rate (now 4.95%p.a.). This places AMP in top spot - 15 basis points above MOVE Bank - for 10 months, and in third spot (tied with ING and Gateway Bank) - 10 basis points behind the leading rate of 5.05%p.a offered by Family First and Heartland, and 5 basis points behind Judo Bank -  for 1 year term deposit rates.

Gateway bank also made two strategic hikes, adding 25 basis points to its 9 month rate and 20 basis points to its 1 year rate, both now 4.95%p.a. This secured it the position of third best rate alongside ING and AMP Bank for 1 year term deposit rates, and the fourth best rate for 9 month rates- behind Credit Union SA and Heartland Bank (5.10%p.a.), Judo Bank (5.05%p.a.) and Police Bank (5.00%p.a.).

Bankwest backs out of personal loan space

On Monday, Bankwest announced it would stop accepting new personal loan applications, effective 11 November 2024. This move follows similar decisions earlier this year by Macquarie and Coles to exit the personal loan market.

If you're a current customer with a Bankwest personal loan, there's no need to worry. Your existing loan remains unaffected, and you can continue to manage your account via the Bankwest App or online banking.

"According to Bankwest, its decision to stop accepting personal loan applications is all about simplifying its products and ramping up its digital offerings. The bank’s parent, CommBank, still has personal loan options available, but the shift could leave some borrowers hunting for other alternatives."

If you’re affected by the change, compare providers on Mozo to see if you can get a better rate. 

ING launches Green Home Loan for existing borrowers 

In other news this week, ING launched its new Green Upgrade Loan, offering a competitive fixed rate of just 3.74%p.a. - however it does have a much higher comparison rate* at 5.16%p.a. Starting next month, existing ING mortgage holders will be able to borrow between $5,000 and $50,000 for energy-efficient home upgrades like solar panels.

The loan is backed by the Australian government’s Clean Energy Finance Corporation (CEFC), which is investing up to $75 million through its Household Energy Upgrades Fund. The initiative aims to make green home improvements more affordable and accessible to Australians, helping them lower their energy bills while supporting the nation’s transition to renewable energy.

*'WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

Mozo reveals Australia’s Best Green Electricity Provider

Following the launch of ING’s Green Upgrade Loan, Mozo has also announced the winners of the Mozo Experts Choice Awards for Energy 2025, recognising the best value electricity and gas providers across Australia. Mozo judges compared a whopping 3,480 plans from 36 energy providers to highlight the best value energy plans for households and businesses, especially those looking to reduce their carbon footprint while managing rising energy costs.

With sustainability top of mind, Mozo awarded Energy Locals as Australia’s Best Green Electricity Provider, for their consistent leadership in providing affordable and renewable energy solutions for homes and businesses. Energy locals won Green Electricity awards across both residential and small business categories in every state analysed. 

“Australians are facing higher energy costs, and while temporary relief from government rebates can ease some of the pressure, it’s crucial to compare energy plans to find lasting value,” says Peter Marshall, Mozo Experts Choice Awards judge. 

“Our goal is to help consumers navigate the complexities of the energy market and find the best deals, whether they're focused on savings or greener energy options.”

To see the full winners list and how we determined the best, click here.

New Mozo report reveals a Home & Contents Insurance Paradox

On Tuesday, Mozo released its latest home and contents insurance report exploring a Policy Paradox; while many Australians are happy with their current insurer, they may be missing out on significant savings by not regularly comparing policies. 

Mozo’s analysis of 162,088 insurance quotes found that Aussies could save an average of $870 per year by switching to a Mozo winner, yet a large number of Australians are sticking with their current provider due to blind loyalty.

“Many Australians feel secure with their home and contents insurer, but that satisfaction could be costing them hundreds of dollars in missed savings every year,” says Wastell. 

“Despite being happy, many aren’t comparing to see if they could save on premiums or get better coverage. With home and contents premiums jumping $288 on average in the past year, the price of not reviewing a policy is becoming more and more expensive. If you’re happy with your current provider, that’s great, but if you’re not shopping around you could be blind to potential savings.”

Key Insights from Mozo’s Latest Report:

• Average potential savings of $870 a year: Aussies could save an average of $870 annually if they switched from the average cost policy to a Mozo winner.
• 1 in 3 policyholders never compare: Despite being “happy,” one in three Australians rarely or never compare their insurance policies, relying on loyalty rather than actively seeking out better deals.
• Home and Contents Insurance premiums  are rising: The average national premium has increased by $288 over the past year, now sitting at $3,499 per year.
• Location is a key factor when it comes to policy pricing: SA offers the lowest average annual ($2,053), while QLD and NT residents pay the most, over $4,400 per year on average.

For a more in depth analysis, you can read the home and contents insurance report here.

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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.

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