Mozo Banking Round Up, June 2020

By Peter Marshall ·

With another financial year done and dusted, the banking industry has been through a whirlwind of changes. Australians could apply for a home loan that started with a ‘2’, we welcomed a new breed of players to the banking industry and much more. 

For a more comprehensive look at the banking movements that occurred during the last month of the financial year, read on for our June instalment of the Mozo Banking Round Up. 

Key facts 

  • Variable Home Loan rates are still being trimmed, and the lowest in our database is 20bp lower than it was a month ago! There’s also still plenty of competition in the fixed rates arena with another lender ducking under the 2.00% mark.
  • A number of providers made changes to Credit Card introductory offers, including two of the major banks.
  • Some sharp new rates were introduced for Personal Loans, and the addition of a product which is the first offering from aspiring bank, Alex.
  • More reduction to At Call Deposit rates, including two of the major banks, and the leading introductory rate suffered a large cut but is still the best in our database.
  • Rates for Term Deposits fell rapidly over the last month, equalling the volume of cuts we saw in March, and dragging the average rate for a 12 month investment down to just 1.11%.

Home Loans 

The average variable rate in the Mozo database is down just 1bp over the last month to now be at 3.42%, but we’re still seeing lenders with already sharp rates improving them further.

Plenty of competition in the fixed rate arena too with one lender launching a new 1.99% offer for up to 3 years, and NAB cut its 1 and 2 year rates. A recent shift is more of the cuts being spread to the longer 4 and 5 year terms now where previous months had focussed strongly on the 1 to 3 year terms. For general stats on borrowing amounts and history,  check out Mozo's Australian Home Loan Statistics page. 

Variable Rates

  • bcu cut 25 basis points from its headline OMG Home Loan owner occupier rate, pricing it at 2.69% (2.69% comp rate*).
  • Freedomlend cut 10bp from its leading rate, putting it back within the top 5 variable rates on the market at 2.39% (2.39% comp rate)* for loans at 80% LVR or less.
  • ING cut 19bp from both its packaged and unpackaged owner occupier rates. It’s packaged rate at 2.64% (2.98% comp rate*) is now the equal second lowest packaged rate in the Mozo database.
  • NAB shaved a further 15bp from its basic Base Variable Home Loans Special, now 2.69% (2.69% comp rate*), the lowest from the Big 4.
  • Reduce Home Loans have set another variable low rate record in the Mozo database, with a 2.19% (2.19% comp rate*) rate on its Super Saver Variable offer.
  • Westpac and the St.George Group both made cuts to their basic home loan products, pricing its OO offerings at 2.79% (2.80% comp rate*, 24bp cut) and 2.64% (2.66% comp rate, 10bp cut) respectively.

Fixed Rates

  • Bank Australia chopped 50bp off its 5 year rate for most types of borrower, now starting from as low as 2.34% for borrowers qualifying for its ‘Clean Energy’ option.
  • Bank of us introduced a special offer of just 1.99% (2.71% comp rate*) for 1, 2 or 3 year terms, but for residents of Tasmania only.
  • Bankwest dropped its 2 year rate by 45bp, now as low as 2.24%. (3.57% comp rate*).
  • Greater cut between 10 and 45bp from its rate of fixed lending options.
  • ING bucked the trend, increasing fixed rates between 5 and 40 bp. However, its rates remain competitive with its owner occupier 2 year rate priced at 2.19% (3.79% comp rate*)
  • MOVE Bank updated its range of home loans, withdrew a number from sale and introduced new Complete Package Home Loans with rates from 2.19% (3.15% comp rate*).
  • NAB cut 10bp from most of its fixed lending suite, pricing its most competitive owner occupier offer at 2.19% (4.02% comp rate*) for 2 years.

*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.

Credit Cards

June was all about introductory offers with a focus on adjustments to existing offers whether introductory rates or bonus points.

  • ANZ adjusted offers on several cards, with a mix of points, cashback and discounts. The Rewards Platinum now offers 60,000 Rewards Points instead of 100,000, the Frequent Flyer Platinum now offers 60,000 Qantas Points plus waiver of the annual fee for the first year instead of 50,000 points plus $195 cashback, and the Frequent Flyer Black now offers 100,000 Qantas points plus $150 cashback as well as another 30,000 bonus points after the first year, instead of 120,000 bonus points and $275 cashback.
  • Bankwest switched the 0% for 6 months balance transfer offer to 2.99% for 9 months on its Breeze Mastercard and Breeze Platinum Mastercard, and added a 0% for 15 months purchase rate to both.
  • Commonwealth Bank removed the 100,000 bonus points that were available on its Ultimate Awards Credit card.
  • HSBC is now offering 20,000 Qantas Frequent Flyer points to new customers of its Premier World Mastercard when they spend $3,000 on the card in the first 90 days, and will give another 20,000 points after the first year.
  • Kogan Money reduced the 0% balance transfer period on its Black Card from 22 to 18 months.
  • Virgin Money increased the 0% balance transfer period on its Low Rate Card from 6 to 18 months. 

Personal Loans 

A quieter month for Personal Loans, although we did see a handful of meaningful rate reductions, plus an aspiring bank’s first product launch.

  • Alex launched its first product, an Unsecured Personal Loan with a rate range starting from 6.95% (7.37% comparison rate*) and a maximum loan amount of $30,000. Alex has ambitions to expand its product range and has applied for a Restricted ADI licence.
  • Beyond Bank decreased the Low Rate Car Loan Special Offer rate by 40bp to 4.89% (5.16% comparison rate*).
  • Easy Street cut its Unsecured Personal Loan rate by 1% to 8.99% (9.27% comparison rate*).
  • NAB ended the application fee waiver offer on its Personal Loans which are now charged the previous $150 fee.
  • Queensland Country Bank introduced specials on its New Car Loan with discounts of up to 2.00% with a rate of 2.99% (3.60% comparison rate*) for loan terms up to 5 years and 3.99% (4.60% comparison rate*).
  • RACQ Bank reduced its Secured Fixed Car Loan by 90bp, to 4.99% (5.54% comparison rate*).

*WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. 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.

At-Call Deposits 

Once again, every rate change for At Call Deposits in June was a cut. Two of the major banks dropped headline rates further, suggesting that cuts may continue for a while yet.

  • ANZ took another 15bp off the both ongoing bonus rate on its Progress Saver (now 0.85%) and the introductory rate on its Online Saver account (now 0.80%).
  • Macquarie cut the introductory rate on its Savings Account by 39bp to 2.26%, but that’s still the highest at call deposit rate in the Mozo database.
  • Ther largest cut we saw last month was from RAMS, which dropped its ongoing bonus rate from 1.65% to 1.20%.
  • Suncorp’s Growth Saver ongoing bonus rate was reduced by 15bp to 1.65%, and its base rate by 5bp to 0.15%.
  • Westpac trimmed the ongoing bonus rate on its Life account by 5bp to 1.00%, and the introductory rate on its eSaver by 10bp to 0.95%.

Term Deposits 

There were a huge number of cuts to Term Deposit rates in June, similar to the volume we recorded in March. None of the big 4 banks now have a term deposit rate over 1%, and no providers now have a rate at 2% or better, for any term. Every term less than 12 months has an average rate under 1.00%, and for the 12 month term the average rate fell by 14bp during the month to 1.11%.

All four of the big banks cut their rates across all offered terms during June, with ANZ reducing by 10 to 15bp, Commonwealth Bank by 5 to 25bp, NAB cutting 10 to 15bp, and Westpac 5 to 15bp.

With 64 out of 82 tracked term deposit providers cutting at least one term during the month, some of the larger across the board cuts observed include: AMP (5 to 40bp), Australian Military Bank (30bp), Auswide Bank (5 to 40bp), Bank of Sydney (15 to 40bp), Beyond Bank (15 to 35bp), Credit Union SA (30 to 80bp), Goldfields Money (13 to 75bp), Greater Bank (25 to 60bp), Judo Bank (15 to 40bp), MyState Bank (5 to 65bp), Queensland Country Bank (40 to 85bp), Rabobank (25 to 45bp), RACQ Bank (10 to 45bp), Suncorp (10 to 55bp), and Unity Bank (5 to 35bp). 

The content of this report is produced using Mozo's extensive database of banking products, which is updated every day.

If you'd like access to more detailed information, please contact us at data.services@mozo.com.au. 

Peter Marshall
Peter Marshall
Banking expert

Peter Marshall has been working in the Australian banking and finance industry for over 20 years and oversees Mozo’s extensive product database. He is regularly sought out for his expert commentary and analysis on banking and interest rates trends by print, radio and TV media.