Mozo Banking Roundup April 2019

Peter Marshall

Wednesday 01 May 2019

Here at Mozo our banking experts maintain a huge database, totalling over 1800 financial products from more than 200 providers, ranging from home loans to personal loans, credit cards, savings accounts and much, much more.

Every month, we track hundreds of changes to these products and our experts compile them in the Mozo Banking Roundup to keep on top of the shifts and trends that can provide valuable insights into the world of banking. 

So if you need to stay up to date on the latest interest rate changes, new offers and market-leading products, check out the April edition of the Mozo Banking Roundup below.

Key points

  • Fixed rates for home loans are tumbling. Three of the four major banks dropped fixed rates during April and the lowest three year rate is down 20bp in the last month.
  • In an unusual move, a second tier bank owned by one of the four major banks increased credit card purchase rates across its range of cards.
  • Interest rates on personal loans were stable throughout the month, but there were two rate cuts of note.
  • Savings rates were largely spared the knife this month with only two changes to report, unlike fixed term deposits.
  • Term deposit rate cuts have accelerated with a total of 35 institutions reducing rates in April, while top rates and averages for many terms are lower than they were in March.

Home Loans

A handful of lenders made strategic cuts to variable home loan rates in April, however it was fixed rates that received the bulk of the attention during the month and almost every change was a rate reduction. This included cuts by three of the four major banks. The best three year fixed rate in our database is now 3.49%, down from 3.69% at the start of the month.

Key Changes - Variable Rates
  • AMP cut 10 basis points from selected tiers on its Professional Package home loan. For Owner Occupiers paying Principal & Interest, loan amounts above $500k are now 3.79% (4.17% comparison rate*), while above $750k, the applicable rate is 3.74% (4.12% comparison rate*).
  • Bendigo Bank slashed 49 basis points from its Basic Home Loan and 10bp from the Express Home Loans during April. Both now 3.79% (3.97% comparison rate*) for Owner Occupiers paying Principal & Interest.
  • G&C Mutual Bank cut 32 basis points from its First Home Buyer focused First Home Loan Premium product, now priced at 3.59% (3.98% comparison rate*), allowing a loan-to-value ratio up 95%.
Key Changes - Fixed Rates
  • Commonwealth Bank reduced owner occupier rates by 10bp on 3 and 4 year terms, now from 3.79% (4.98% comparison rate*) and 4.24% respectively (5.13% comparison rate*), and 30bp on 5 year rates, also from 4.24% (5.05% comparison rate*). Investor rates were cut 10bp on 2, 3 and 5 year terms. It was the first of the major banks to adjust fixed rates in this cycle.
  • Heritage Bank cut 5 to 40bp from its entire fixed range, reductions focused on longer terms. Owner occupier packaged 5 year rates are now 4.09% (4.24% comparison rate*).
  • ING also cut owner occupier fixed rates during the month. 2 year rates were cut 16bp, 3 year cut 19bp and 10bp for 5 years. The 3 year packaged rate now priced at 3.64% (4.63% comparison rate*).
  • loans.com.au introduced a 3 year fixed rate special at 3.59% (3.89% comparison rate*) for owner occupiers making principle & interest repayments and with a loan-to value ratio of up to 80%.
  • Macquarie also adjusted fixed rates, cutting 20bp from 2 and 3 year terms, and 40bp from 4 and 5 year rates for owner occupiers. The 5 year rate now comes in at 3.89% (4.13% comparison rate*).
  • Following moves by other major banks, NAB cut 3 and 5 year rates for owner occupiers by 10bp. For investors looking to fix rates, 2 year rates were cut 10bp, 3 year cut 20bp, and 5 year down 6bp.
  • Suncorp cut its 3 year rates dramatically, slicing 45bp from both its owner occupier and investor terms, now just 3.49% (4.25% comparison rate*) and 3.69% (4.52% comparison rate*), respectively. These rates now represent the lowest in the Mozo database for each borrower type.
  • Westpac was the second major bank to cut fixed rates in April. Owner occupier fixed rates were reduced by 10bp for 3 years, now 3.79% packaged (4.69% comparison rate*), 20bp for 4 years and 10bp for 5 years. Investor rates were cut 6bp for the 2 year term, 20bp for 3 years, now 4.39% packaged (4.12% comparison rate*)) and 10bp for a 5 year fixed period.

Credit Cards

Purchase rates on credit cards don’t shift terribly often, but this month the St.George group, a subsidiary of Westpac, increased rates across all of their cards. There were also a number of adjustments to introductory and bonus points offers.

Key changes
  • ANZ reduced the introductory bonus points offered on five of its cards, while adding or increasing an accompanying cash bonus. For the Rewards Black card, the introductory points were cut from 120,000 to 100,000 ANZ Reward Points, and a $100 cashback was added. The spend required to activate this offer was also reduced from $7,500 in the first 3 months to $4,000. The Rewards Platinum, Frequent Flyer, Frequent Flyer Platinum and Frequent Flyer Black cards were adjusted similarly.
  • Bendigo Bank introduced a 0% balance transfer for 18 months on its Low Rate Mastercard, reverting to the competitive cash advance rate of 13.99%. A 2% set fee is applicable to the offer.
  • The St.George Group (including Bank of Melbourne and BankSA) increased purchase rates by 25 basis points and cash advance rates 100 to 200 basis points on its entire personal range of credit cards during April. The Amplify rewards program cards now have 19.74% purchase rates while low rate Vertigo branded cards now have purchase rates of 12.99%. All cards now have uniform 21.49% cash advance rates.
  • Westpac added an introductory 0% purchase rate for 9 months on the Low Fee Platinum card while reducing the 0% balance transfer rate from 24 to 18 months on the Low Rate card. The annual fee for the Low Rate and Altitude Platinum cards are now also waived in the first year.

Personal Loans 

One credit union made a large reduction to its unsecured loan rate while an online lender applied a cut to its already competitive rate for used cars. 

Key Changes 

  • CUA cut the interest rate on its fixed Unsecured Personal Loan from 11.99% to 9.89% (10.14% comparison rate^), a reduction of 210 basis points.
  • loans.com.au cut 50 basis points from its fixed Used Car Loan to match its rate for new cars, now both 5.44% (5.99% comparison rate^). 
  • SCU reintroduced the $100 application fee on its variable rate New Car Loan. The interest rate for this secured lending product remains at 6.45% (6.59% comparison rate^).

Savings Accounts

While there were plenty of changes to fixed term deposit rates in April, there were only two changes made to savings account rates this month, both reductions.

Key Changes

  • Newcastle Permanent cut the base rate on its Online Savings Account from 1.10% to 0.85%. The introductory rate of 2.80% for the first 3 months from account opening remains unchanged.
  • Police Bank cut the ongoing bonus rate from 2.40% to 2.30% on its Bonus Savings Account. The base rate of 0.50% and a $100 deposit, no withdrawals during the month remain.

Term Deposits

The pace of term deposit rate cuts has accelerated over the past few months with April’s tally being more than double the number of cuts that we recorded in May, and higher than we’ve seen for years. Over the last month the best 1 year rate is down 5bp to 2.80% and the average for that term dropped from 2.49% to 2.44%. The best 2 year rate fell from 3.00% to 2.90% and the best 5 year rate is down from 3.20% to 3.05%.

Key Changes

  • AMP implemented some of the largest reductions during April, cutting all terms from 1 month to 5 years by 20 to 40 basis points. Many of these rates still hold competitive market positions, though they have dropped out of the running as leading rates.
  • While Bank of Sydney increased a couple of minor terms during the month, the vast majority were cut by up to 30bp. It previously held the top spots in the Mozo database for 9 out of the 12 months it held rates in.
  • Across the board rate cuts were observed from Bank of Melbourne, BankSA, BankVic, Citi, Commonwealth Bank, ING, Macquarie, MyState Bank, NAB and St.George. These reductions ranged from 5 to 20 basis points.
  • Other institutions only looked to reduce their longer term deposit (more than a year) rates during April. These included ANZ, Auswide Bank, Bankwest, P&N Bank, People’s Choice Credit Union, Rabobank, RACQ Bank, Rural Bank and Suncorp. These cuts also ranged from 5 to 20bp.

You an also download the April 2019 Mozo Banking Roundup as a PDF. Or, if you'd like access to more detailed information, please contact us at data.services@mozo.com.au.

*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.

^^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. WARNING: Comparison rates apply 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.

Product details in the Market Snapshot are as at the end of the month and product changes referred to are changes since the start of the month, unless otherwise specified.
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