Mozo Banking Roundup August 2020

By Peter Marshall ·

As the country enters the one of the most busiest seasons of the year for property, it seems that lenders are pulling out the big guns to entice certain kinds of borrowers. Home loan rates that begin with a ‘2’ are slowly becoming the norm, however lenders are still sharpening their rates for borrowers with lower LVRs. 

But while it might have been a busy month for home loans, there was a lull in other areas. For a detailed look about all the product changes the Mozo database recorded in the last month, read on for this month’s edition of the Mozo Banking Roundup.

Key facts

Lenders continue to push ​Home Loan rates down towards 2%, and some have even broached that magic point. Others are launching new rates for borrowers with lower LVRs.

A busy month for ​Credit Card providers with many offers being changed, including from some of the big 4 banks and subsidiaries.

Not too many ​Personal Loan changes to report, but there were some large cuts to rates.

At Call Deposit
rates fell sharply again last month although the best ongoing bonus rates remain above the best term deposit rates, for now.

Term Deposits
​rates continue to fall, but are not as steeply as previous months, signaling we may be approaching an interest rate floor for deposits.

Home Loans

Lenders continue to push headline rates down towards, or in some cases even past, the 2% mark. And the focus on low LVRs continues with one lender introducing a new feature that automatically drops the rate repayments see the loan reach the next LVR band.

Variable rates

86 400 introduced tiered pricing based on LVR’s with lower rates for ratios below 70% and 60%. Variable rates now start from 2.59% (2.87% comp rate*), a 25bp reduction.

AMP
dropped its leading Professional Package rate by 14bp to 2.59% (3.00% comp rate*).

Athena
launched a new AcceleRATES feature to its home loans which automatically moves borrowers to lower rate tiers as they reach lower LVR tiers with a new minimum rate of 2.39% (2.39% comp rate*) for a LVR under 60%.

Homestar
​slashed its already low rates, reducing its headline rate by 20bp to 2.29% (variable rate for owner occupiers with an LVR of <70%, 2.34% comp rate*).

loans.com.au
reduced the rate on the Smart Home Loan for Owner Occupier P&I rate by 9bp to 2.48% (2.50% comp rate*). It also launched an Investor Smart Booster bundled product which offers a 1.99% variable rate for 1 year (reverting to 2.74%, 2.76% comp rate*) restricted to those with an Owner Occupied loan.

ME
​introduced amount tiers on the Basic Home Loan Owner Occupier P&I rates, increasing the rates available for loans with amounts under $150k by 94bp to 4.11% (4.13% comp rate*) while cutting rates for new borrowings above that amount by 59bp to 2.58% (2.60% comp rate*) for <80% LVR.

Well Home Loans
cut its owner occupier rates by 15bp to 2.32% (2.35% comp rate*) for LVR<80% and 2.52% (2.55% comp rate*) for LVR <90%.

Fixed rates

Bank First ​reduced it’s 2, 3 and 5 year fixed rates by 15 to 20 basis points. Its leading 3 year packaged rate now 2.09% (2.98% comp rate*), the lowest at that term.

ME
​cut between 20 and 40 basis points on its Flexible Home Loan product, for terms 1 to 3 years for owner occupiers paying principal & interest. For borrowers with an LVR less than 80%, a 2.19% fixed term is now available for 3 years (3.30% comp rate*)

Regional Australia Bank
​also reduced its 1, 2 and 3 year fixed rates during the month, with its Partnership Advantage rates cut a flat 30bp. An Owner Occupier can now receive a 2.34% rate fixed for 3 years (3.35% comp rate*)

Virgin Money
cut its fixed 3 year and 5 year specials during August, with its 5 year rate now just 2.49% (2.87% comp rate*) for loans greater than $300k, <80% LVR. This makes it the lowest 5 year rate in the Mozo product database.

*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

Plenty of Credit Card offers on the move this month including from several of the major banks.

ANZ
swapped the 0% for 18 month balance transfer deal on its Platinum card for a 0% for 17 months purchase rate offer.

Both ​Bank First and ​Community First Credit Union have removed the 0% for 6 months BT periods previously on offer.

Bendigo Bank
removed the 0% for 15 months purchase rate offer on its Low Rate Mastercard, replacing it with a 0% for 6 months BT period and waiving the $45 fee in the first year. The Platinum Rewards Mastercard also now has a 0% for 6 months BT period but the 50,000 bonus Rewards Points available previously have been removed.

Kogan Money
is offering a $300 kogan.com credit for new applications for its Black Card up to the end of September provided $3,000 is spent on eligible purchases in the first 90 days. This is up from $50 credit for each of the first four months in which $1,000 or more is spent.

NAB
extended the 0% BT offer on its Low Rate Card from 6 to 20 months, and removed the 0% for 6 months purchase rate.

Westpac
introduced a 0% for 18 months BT offer with a 1% fee on its Altitude Platinum card, with a reduced annual fee of $99 in the first year. The bank’s Low Fee Card now has a 0% for 15 months on purchases offer plus 0% for 6 months on BT’s combination offer instead of the previous 0% for 9 months on purchases.

Personal Loans

Very few changes to Personal Loans pricing this month, but some of the large changes that were made indicate there’s still very strong competition for new business.

NRMA
reduced its fixed new Car and Used Car Loan fixed rates, with New Car down 70bp to 4.99% and Used Car down 50bp to 6.49%.

RACQ Bank
​increased application fees by $75 on both its Fixed Car Loan and Unsecured Personal Loan, now $470 and $275 respectively.

RACV
​ cut its fixed New Car Loan rate by 70bp to 4.99%.

Regional Australia Bank
dropped the variable rate for its Accelerator Car loan by 100bp to 6.49%.

The ​St George group cut fixed Unsecured Personal Loan rates by 150bp to take them down to 9.99%.

*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

Another month of heavy At Call Deposit rate cuts as the bottom falls out of the deposit market.

86 400 ​
trimmed its ongoing bonus rate by 10bp to 1.60%.

Bank of Queensland
cut the ongoing bonus rates on its fast Track Saver (down 15bp to 1.50%) and Bonus Interest Savings Account (down 10bp to 1.15%).

Commonwealth Bank
reduced the introductory bonus rate on its NetBank Saver by 5bp to 0.95%.

Macquarie
made another cut to the introductory rate on its Savings Account, down 50bp to 1.50%. A little over two months ago that rate was up at 2.60%.

Rabobank’​s Premium Saver
ongoing bonus rate is down 25bp to 1.20%. There was also a 25bp cut applied to the introductory rate on its High Interest Savings Account, now 2.00%.

RAMS
dropped the headline rate on its Saver Account from 1.20% to 1.10%.

The ongoing bonus rate on ​Suncorp’​ s Growth Saver Account was cut by 15bp to 1.35%.

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Term Deposits

While term deposit rates still fell in August, there was a slight slowing in the volume and degree of reductions. Out of the 86 ADIs we track in our term deposit product database, 58 of them cut rates in August, compared to 70 in July. The average 12 month term rate dropped 8 basis points to 0.91% (11bp in July).

Commonwealth Bank
​cut its best offering 5bp, now 0.85% for 10 months, ​NAB ​reduced its 1, 2 and 3 month terms, 10, 15 and 5bp respectively and ​Westpac ​shifted its special offering from 7 months to 8 months, reducing it 5bp to 0.75% in the process. ​ANZ ​did not make changes to its offerings in August.

The largest across the board reductions we observed from the rest of the market include: ​Bank First (20-30bp), ​Bankwest (10-20bp), CUA (10-20bp), ​Hunter United (15-30bp), ​Illawarra Credit Union (20-90bp), ​Judo Bank ​(2-20bp), ​Newcastle Permanent (20bp), ​Police Bank (15-20bp), (15-40bp), ​Summerland Credit Union (20-30bp), Suncorp​ (10-20bp), and ​UBank​ (5 to 25bp).

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.