Mozo Money Moves: 2024 - the year we held our breath for an RBA move that never came.

Welcome to the final Mozo Money Moves for 2024 – and what a year it’s been!

As the financial world winds down for the holiday season and rate movements ease, this week’s column steps away from the usual week-to-week updates. Instead, we’ll reflect on the money moves that shaped 2024.

Before we dive in, a heartfelt thank you goes to the Mozo research, compliance, and data team. This column—and the Mozo database of 1,700+ Australian personal finance products from over 250 providers that powers it—wouldn’t be possible without their tireless work. Their meticulous tracking and analysis ensure the Mozo database remains one of Australia’s most comprehensive tools for comparing personal finance products. Thanks to their efforts, Mozo continues to empower Aussies to make smarter financial decisions without the hassle of combing through the fine print.

Let’s take a look back at the year that was.

RBA Rolls Out New Playbook

This year, the Reserve Bank of Australia (RBA) underwent a significant transformation, driven by reforms outlined in the 2023 Treasury Review, commissioned by Treasurer Jim Chalmers. With the aim of modernising the central bank, and ensuring it remains agile and effective in addressing Australia’s evolving economic challenges, the key changes implemented were:

• New Streamlined Meeting Structure: The RBA reduced its meetings to eight per year, adopting a two-day format similar to that of other global central banks like the Federal Reserve and The Bank of England. This shift replaced the traditional monthly schedule (except for December) and allowed for more in-depth analysis and deliberation.
• Enhanced communications: Under Governor Michele Bullock’s leadership, the RBA introduced regular press conferences following each monetary policy decision. These eight briefings offered clearer guidance to economists, media, and the public, reinforcing the bank’s commitment to transparency.

Looking ahead, 2025 will bring further evolution with the introduction of a dual-board structure - the Monetary Policy Board will focus on interest rate decisions, while a separate Governance Board will oversee the bank’s operations. It will be exciting to see whether these changes will influence the accessibility of financial information and increase financial literacy in Australia - we hope so!

RBA Cash Rate Decisions 2025 

The new meeting structure of announcing cash rate decisions eight times per year will continue into 2025, with the RBA set to meet on the following dates:

1. February 17 & 18 
2. March 31 & April 1 
3. May 19 & 20 
4. July 7 & 8 
5. August 11 & 12 
6. September 29 & 30 
7. November 3 & 4 
8. December 8 & 9 

Rates shifted in anticipation of RBA moves that never came

This year was one of predictions, what ifs, and preparations for RBA cash rate moves… that never came. However, while Australia’s official interest rate held firm at 4.35%p.a., rates across home loans and savings products continued to fluctuate, with particularly big swings in fixed home loan rates and term deposits (which are essentially fixed savings rates).

Home Loans

Many homeowners hoped for relief in the form of lower rates to ease the burden of rising repayments. However, despite no official rate cut from the RBA, the market continued to shift.

In 2024, the home loan market experienced a year of fluctuating rates, as lenders adapted to shifting expectations around the RBA cash rate decisions. Early in the year, we saw some lenders reducing variable rates, while others increased them as competition eased. Cashback offers, once a key draw for borrowers, also continued to dwindle, and several were withdrawn altogether. 

As the year progressed, and confidence in the future direction of the cash rate grew, fixed home loan rates started to fall, with 3-year fixed terms below the 6% mark becoming more common. Lenders adjusted their offerings, anticipating the RBA's next move, and many focused on lowering their fixed-rate owner occupier loans to start with 5, and attract borrowers seeking stability.

Variable and Fixed Rate Movements: A Mixed Bag

Throughout the first half of the year, both variable and fixed rates moved in different directions. While some lenders made small adjustments to their variable rates, including minor cuts and hikes, the clear trend for fixed rates was a downward shift, with most moves coming in the form of reductions. 

In the middle of the year, the market saw continued mixed movements, with some lenders pushing rates up while others made cuts, especially on fixed-rate home loans, as expectation of a potential RBA rate cut fueled some of the reductions. Commentary on a potential hike - after a surprise inflation uptick reading -  fuelled some fixed rate rises in May, and then another CPI surge in June caused further rate hike panic.

However, as inflation softened, market sentiment shifted, and by mid-year, more lenders had started offering fixed-rate options around 5.50%, particularly on the 3-year terms, In July, NAB broke the Big four stalemate and cut its 3 year fixed rate by 60 bps, which prompted some of the other big four banks to sharpen their offers. Westpac cut in August, followed closely by Commbank.

In the second half of 2024, lenders continued to adjust their rates to maintain a competitive edge, with most changes being cuts. By September, the market was experiencing a substantial number of reductions, particularly in fixed rates, as inflation figures softened further and the RBA’s potential moves became clearer. Over 1,300 fixed rate home loan cuts were tracked on the Mozo database in September , and over 200 variable rates were also slashed. With expectations that the RBA might soon cut the cash rate.

In October, ANZ joined the Big Four banks on the fixed rate cut bandwagon, offering a fixed home loan rate starting with 5. By November, this trend of falling rates continued to persist, although at a much slower pace. While variable rates continued to decrease, there were also some adjustments to fixed rates. 

The majority of changes were cuts, but a few lenders implemented small increases - perhaps in an effort to dial back some of the enthusiasm they had that a rate cut would come by the year’s end. 

Throughout 2024, the home loan market was characterised by a balancing act between lowering rates, responding to RBA expectations, and staying competitive. While variable rates held steady for much of the year, fixed rates saw consistent reductions, giving borrowers the opportunity to lock in lower rates. Lenders’ strategies varied, but the overall feeling was one of cautious optimism, as economists, commentators and lenders kept a keen eye on the RBA.

Leading Home Loan Rates to close out 2024

At-call deposits held steady, but term deposits were in flux

At the start of the year, at-call deposit rates largely held steady, with only minor adjustments to introductory and bonus rates. In contrast, term deposit rates fluctuated in response to market speculations about potential cuts to the RBA cash rate. Short-term rates experienced some increases as banks anticipated an RBA rate cut - but at this time longer-term term deposit rates were more subdued, with fewer changes.

By mid-year, at-call deposit rate moves slowed down even further, with minimal movement outside of occasional increases to bonus rates. However, term deposit rates became volatile, especially in the short-term offerings (6, 12, and 24 months). Mozo also released its Savings Report for 2024 which revealed savers who switch have a higher average rate and savings amount, proving the value of comparing rates and shopping around for the best deal.

Entering the latter part of 2024, term deposit rates continued their downward trajectory, largely driven by the RBA's hesitancy to cut rates, and by the end of August, there were no longer any 2-5 year term deposit leading rates over 5.00% p.a.. Despite expectations of a rate reduction fading, competition for short-term deposits remained strong. Big Four banks began to shift, and NAB adjusted their term deposit rates twice in a two month period - in August and October. 

By October, the pace of rate cuts on term deposits had accelerated significantly, with 86 cuts from 16 providers in the first few days of the month alone. The majority of rate cuts targeted shorter terms—roughly 75% of providers reduced their 12-month rates, and 69% made adjustments to 6-month products.  

In November, as the year came to a close, competition among rate leaders like Judo and Heartland intensified, with some banks hiking certain terms to jump to the top of the tables. To maintain their competitive edge, they made small, strategic adjustments, adding amounts as small as 5 basis points to their term deposit rates to secure first or second position on the tables. These incremental changes highlighted the fierce battle for depositors as banks tried to capture the attention of savers looking for the best returns in an increasingly uncertain market. As you can see from the leading table in the section below, Heartland Bank and Judo Bank have finished the year on top.

While the at-call savings space was much quieter than term deposits, especially in the latter part of the year, there were some subtle but important changes. In September and October, two major banks, ANZ and Westpac, reduced their ongoing base rates on At-Call Deposit accounts, but kept their headline rates the same.

This now means customers who don’t meet the conditions for the bonus rates could see their actual returns drop significantly, despite the overall rates remaining unchanged. With over a one percent difference between the rates on standard ANZ savings accounts and ANZ Plus accounts after the savings changes this year, it has become clear ANZ is trying to incentivise customers to switch to their digital brand. With Westpac the last of the Big Four to launch a digital brand - is this something we can expect to see in 2025?

Lessons ahead of a potential RBA Move in 2025

As we close out 2024, the future of the RBA's rate decisions remains uncertain. While inflation remains the biggest wildcard, Mozo is still confident that the first move from the RBA - after the 13 hikes in 2023 - will be a cut. 

Homeowners and savers alike will need to keep their eyes on the horizon for potential changes, but in the meantime there are still a number of competitive rates on offer. While 2024 may have been quieter than expected, 2025 could bring the changes many are hoping for. 

Until then, it’s essential to keep comparing rates and looking for opportunities to save, whether you're paying down your home loan or building your savings.

Leading At-Call Savings Rates

Leading Term Deposit Rates

Insurance costs skyrocket, but savings still on the table

Outside of interest rate changes on personal finance products, another key trend from 2024 is clear: insurance premiums have taken a sharp upward turn. 

From car and home insurance to travel and pet policies, Australians have seen significant price hikes. However, amidst the rising costs, Mozo's research has uncovered a silver lining—there are still plenty of opportunities to save for those who shop around and compare policies. 

Mozo's 2024 insurance reports covered four key insurance areas, to find that - despite rising premiums - Aussies who switched could still score significant annual savings.

Travel Insurance

In January, Mozo released the  Travel Insurance Report, based on the Mozo Experts Choice Awards for Travel Insurance 2024. With Australians travelling in droves—8.3 million heading overseas in the 2022-2023 financial year—staying protected on holidays became much more expensive. The research showed:

• Comprehensive travel insurance costs jumped 24% since 2022
• The average comprehensive travel insurance policy for a 14 day trip costs $515.
• The average cost per day for comprehensive travel insurance was between $13-20
• Comparing travel insurance quotes could save travellers $100 to $150 per policy.
• The cheapest policies found were Freely at $6/day for Basic Holidays, and Qantas Insurance at $8/day for Cruise Holidays. 

Car Insurance

While travel insurance premiums rose considerably, this type of insurance is not an everyday expense for most Australians. Car insurance, on the other hand, is. Even though car insurance premiums did not rise as dramatically in percentage terms as travel insurance did, they had a much sharper impact on people’s wallets, both because of the necessity of  this insurance, and dollar value increase thanks to a four figure annual premium cost.

Mozo’s Car Insurance Report, released in October as part of the Mozo Experts Choice Awards for Car Insurance 2024 found that:

• In 2024, the average annual car insurance cost was $1,717, jumping by 16% year on year.
• Drivers aged 20 or  younger can pay 3x more than drivers 70 and older ($3,552 vs $1,222).
• Electric vehicles cost $2,767 a year to insure on average, 73% more than owners of petrol cars pay.
• Mozo experts found there were potential annual savings of $463 on offer for Aussies who made the switch to Budget Direct, a saving of 28%.

Home Insurance

In November, as part of the Mozo Experts Choice Awards for Home Insurance, Mozo found even more savings on offer for savvy homeowners looking to cut costs on insurance. However, the Home & Contents Insurance Report revealed despite rising costs, nearly 1 in 3 policyholders (27%) don’t regularly compare their policies, potentially missing out on better deals.

• Average Annual Cost: Australians are now paying an average of $3,499 per year for home and contents insurance—a 9% increase over the past 12 months.
• By switching to a Mozo Experts Choice Award winner, Mozo research showed Australians could save up to $870 annually on their premiums.
• For 63% of Australians, the primary reasons for selecting a policy are the level of cover and low premiums, while 21% stick with familiar providers for peace of mind.
• Annual premiums varied by state, with Queensland ($4,398) and the Northern Territory ($4,547) seeing the highest average rates due to natural disaster risks.

Pet Insurance

In 2024, caring for pets became a more expensive commitment, with insurance costs continuing to climb. While pet insurance didn’t grab as many headlines as other types of coverage, rising premiums undoubtedly impacted Aussie pet owners. This year, Mozo’s Pet Insurance Report, part of the Mozo Experts Choice Awards for Pet Insurance, revealed the financial strain and potential savings for those insuring their furry companions.

• The cost of insuring a 1 year old dog was $113 a month on average, while a 5 year old dog cost around $161 a month. 
• Cats are much cheaper to insure, costing $59 a month on average for a 1 year old cat, and $77 a month for a 5 year old cat.
• Mozo analysis revealed that older pets are much more expensive to insure, but there are significant savings on offer for switching to a better value policy.
• Owners of Rottweilers stand to save the most on insurance by switching, with annual savings for a 5 year old Rottweiler reaching up to $1,959 on average.
• Cat owners could also save hundreds of dollars a year by switching from the average to the cheapest cost policy. Up to $392 in annual savings were on offer for owners of 5 year old Domestic Shorthairs.

Credit Card market shifts in 2024

In August of this year, Mozo research undertook the mammoth task of reviewing 10 years of credit card rates and fees, to discover that Australians have transformed how they use credit cards, cutting debt and adopting savvier spending habits, while embracing Buy Now Pay Later (BNPL) services. 

On the Mozo database there was also a significant devaluation in the rewards credit card space, as points earning potential drops and the value to redeem those points increases.

Mozo analysis revealed:

• Smaller Spending Habits: Average credit card purchases fell by 23%, from $118 in 2014 to $90 in 2024.
• Declining Credit Card Debt: Credit card balances accruing interest also dropped by a whopping 45%, from $31.8 billion to $17.5 billion.
• Interest Rate Polarisation: Mozo noted a significant decline in mid-range offerings and a rise in the number of cards with purchase rates under 10% and over 20%. Mid-range cards (10–15% p.a.) shrank by 57%, while low (<10%) and high (>20%) rate cards increased.
• Rising Annual Fees: The average annual fee on credit cards rose by 25% from 2014 to 2024, from $112 to $135, with the highest fee nearly doubling from $700 to $1,200.
• BNPL dominance: In April, Mozo shared new research with the Sydney Morning Herald that 51% of Australians have a BNPL account, with an average outstanding BNPL debt of $919. Some individuals held up to $1,766 across multiple accounts.
• Rewards credit cards are being devalued: In 2014, close to half of the rewards credit cards on the Mozo database offered a positive rewards net value of an annual spend of $20,000, but the Mozo Experts Choice Awards for Rewards Credit Cards data from 2024 showed less than one in ten. After 20 June 2024, all Big Four banks had shifted their rewards credit card purchase rates to 20.99%p.a.

Superannuation was put under the spotlight

2024 proved to be a transformative year for superannuation in Australia, with key regulatory changes introduced that are likely to shape the future of retirement savings, including: 

• Superannuation Guarantee (SG) Increase: The SG increased from 11% to 11.5% in July, with a further rise to 12% set for 2025. While the hike seems modest on the surface, incremental increases have a meaningful impact on long-term retirement savings, thanks to the magic of compound growth.
• Superannuation on Parental Leave Pay: A significant change in 2024 was the passing of legislation to include superannuation payments on Parental Leave Pay, set to take effect from 1 July 2025. This change, aimed at improving the retirement outcomes for parents on leave, particularly women, ensures that 12% of Parental Leave Pay will be paid into eligible workers’ superannuation funds. This move helps address the superannuation gap for those taking time off to care for children.

2024 also marked the launch of the inaugural Mozo Experts Choice Awards for Superannuation, a new initiative acknowledging the best-performing super funds in the market. As more Australians recognise the importance of managing their super, these awards highlighted the funds providing the best returns and lowest fees.

Super report reveals Aussies are not comparing enough.

As part of the awards, Mozo also released its first Superannuation Report, which revealed:

• More than half of Australians (58%) rarely or never compare their super fund’s performance, with 36% of Australians checking their super performance no more than every two years.
• More than 40% of Australians lack confidence in their super balance.
• With a $100,000 balance, switching to a Mozo Experts Choice Award winner could add anywhere from $6,299 to nearly $16,000 to your account over 5 years.
• For a $50,000 balance, Mozo Experts Choice Award winners’ average fees were $175 compared to $508 for non-winners, a saving of over $330. 

Big Bank Mergers and brands closing their doors

This year also brought some big bank mergers, with ANZ acquiring Suncorp in July, the announcement that Qudos Bank and Bank Australia would join forces and the introduction of a customer-owned banking powerhouse in People First bringing together People’s Choice and Heritage Bank.

NAB also finalised its acquisition of Citi, started in 2022, and as of 24 February 2024 all consumer banking products were transferred over to NAB branded accounts.

There was also the closure of a household banking name, as Rams was put out to pasture (couldn’t help ourselves with that one), announcing it would no longer be accepting new home loan applications. 

That’s a wrap from the team at Mozo for 2024!

Thank you to our readers for following along with Mozo Money Moves in 2024. In 2025, we’re looking forward to diving back into the world of personal finance, to bring you up to date with all the key changes you need to know about (that may be hidden in the fine print) but for now, we are taking a break! 

We look forward to bringing you more insights in January 2025– but until then, keep comparing, keep saving, keep making smart money moves.

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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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