Mozo Banking Roundup January 2020

By Peter Marshall ·

We're kicking off 2020 in style, with plenty of movement in personal finance products to start the year from falling home loan rates to brand new savings offerings from neobanks.

With the anticipation of another rate cut to come early this year, we've generally seen rates trending downwards across most product categories, which is good news if you're a borrower - but not so good if you're trying to grow a savings stash.

Either way, knowledge is the key to success, so keep up to date with the latest changes in the first instalment of the Mozo Banking Roundup for 2020.

Key facts

  • Fixed Home Loan rates have been falling with the best 2 and 3 year rates in our records lower than a month ago, and one of the major banks dropped some of the rates offered on its basic loan.
  • One of the major banks launched a new premium card with a monthly fee that's waived if a minimum spend is met, and a card that disappeared a few months ago has been relaunched with new offers.
  • Only a few providers made Personal Loan rate changes, but they were all cuts, and large ones too. One even dropped rates by 6%!
  • Neobanks are busy launching their Savings products, one of which has the equal best ongoing rate in our database, but with no conditions attached. Meanwhile, it's business as usual at the big banks where some deposit rates have been cut again.
  • We’ve now recorded 16 straight months where we saw more Term Deposit rates being cut than increased.

Home Loans

We recorded a handful of reductions to variable home loan rates, including one of the major banks reducing the prime rate on its basic product. Most of the action was in fixed loans though, where the volumes of cuts were similar to the last few months. Most of those were for the 2 and 3 year terms, resulting in the best 2 year rate in the Mozo database being 19bp down from last month, and the best 3 year rate 20bp lower than last month.

Variable Rates

  • ANZ shaved 12 basis points off its leading owner occupied offering during the month. Its Simplicity PLUS Special Offer is now available at 3.12% (3.16% comp rate*) for LVR less than 80%.
  • Bank Australia cut its sharpest rate, a Basic Home Loan special, by 30 basis points to 2.95% (2.99% comp rate*). It also introduced a Clean Energy Home Loan offer, discounting its packaged rates by 40bp for the first 5 years of the loan when buying or building a NatHERS rated 7 Star or higher home. The headline rate for owner occupiers with an LVR less than 70% is 2.88% (3.49% comp rate*).
  • People’s Choice Credit Union cut 9bp from its Basic Variable Special Offer, now 2.99% (2.99% comp rate*) for Owner Occupiers, LVR <80%.
  • Suncorp made cuts to a selection of its Home Package Plus rates. The First Home Buyer special was reduced 20bp to 3.09% (3.10% comp rate*), while the LVR adjustments and small decreases were made to its standard offerings.
variable home loans january 2020

Fixed Rates

  • Bank Australia’s new Clean Energy Home Loan also offers 40bp discounts on its fixed packaged rates, pricing them as the lowest on offer in our database for 3 years. Its less than 70% LVR offer is advertised at 2.44% (3.44% comp rate*). This product is subsidised by the Government-backed Clean Energy Finance Corporation.
  • Bankwest cut between 6 and 125 basis points on its range of fixed lending products. Its 5 year package for owner occupiers was reduced by 60bp to 3.19% (3.85% comp rate*).
  • Online home loan provider Freedomlend also made sizable reductions, decreasing the rates on its fixed lending suite by 25 to 120 basis points. Its 3 year fixed offering is now 2.69% (3.27% comp rate*), one of the lowest available in the market. 
  • Greater Bank adjusted its two and three year fixed rates downwards with discounts of 8bp for owner occupiers, and 13bp for investors. It’s 3 year rate is now priced at 2.89% packaged (3.92% comp rate*).
  • ING cut both packaged and unpackaged fixed rates for Owner Occupiers by 10 to 65 basis points. Its packaged 5 year rate is now below the 3% mark at 2.99% (3.83% comp rate*), representing a 45bp reduction.
fixed home loans january 2020
*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

A new card was launched by one of the major banks, pitched at the premium end of the market. Two providers switched their offers from balance transfer (BT) and purchase rate combinations to BT-only. 

  • Bendigo Bank’s Low Rate Mastercard was offering 0% for 15 months for purchases as well as 0% for 6 months for balance transfers, but has switched to 0%  for 18 months on balance transfers only.
  • Citi relaunched its Prestige card, after an absence of a few months, with an offer of 150,000 bonus Citi reward Points with a required spend of $5,000 in the first 90 days and 0% interest on balance transfers for 6 months.
  • Commonwealth Bank launched its new Ultimate Awards card with a monthly $35 fee that is waived with a minimum spend of $2,500 on the card per statement period. 100,000 CommBank Awards points are available on this card with a $5,000 spend in 90 days.
  • HSBC removed the 0% for 12 months offer for both purchases and balance transfers on its Platinum Credit Card, replacing it with 0% for 22 months for balance transfers only.
  • Jestar no longer offers discounted annual fees in the first year of card ownership.

Personal Loans

While we’ve only seen the usual low volume of changes to personal loan rates, the size of the changes is notable, ranging from 100bp to 600bp. All the changes below relate to fixed rates, with just one variable rate change.

  • Heritage Bank reduced the rate on its Car Loan with a cut of 100bp to 5.99% (6.63% comp rate*), and its unsecured Personal Loan rate was cut by 200bp to 8.99% (9.62% comp rate*).
  • Hume Bank’s Secured Personal Loan rate is down 100bp to 5.95% (6.16% comp rate*), while its Unsecured Personal Loan rate was reduced by 200bp to 9.95% (10.17% comp rate*). The application fee on both is up $25 to $150.
  • Latitude’s particularly large rate cuts have made a major improvement to its market position. Both its Secured and Unsecured options are down 600bp, with the Secured rate now starting from 6.99% (8.25% comp rate*) and the Unsecured at 7.99% (9.24% comp rate*).
  • MyState Bank cut rates on its Unsecured General Purpose Personal Loan by 300bp, with both fixed and variable options currently at 9.99% (13.51% comp rate* for the variable option).
  • NOW FINANCE reduced its Unsecured Personal Loan rate by 100bp, now from 7.95% (9.56% comp rate*).
personal loans january 2020
*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.

Savings Accounts

Xinja grabbed a lot of attention with its new market leading, no strings, ongoing at-call savings rate. This was neatly juxtaposed by two of the major banks cutting their short term introductory bonus rates.

  • ANZ reduced both the introductory and base rates on its Online Saver account by 5bp, now 1.55% and 0.05% respectively.
  • Bank of Queensland cut the ongoing bonus rate on its Bonus Interest Savings Account by 10bp to 1.40%.
  • GMCU dropped the ongoing bonus rate on its Bonus Saver Account by 55bp to 1.15%, and the base rate on that account by 4bp to just 0.01%. Its iSave account has a base rate only, cut by 10bp to 1.05%.
  • NAB cut the introductory rate on its iSaver account by 15bp, now 1.55%, but left the base rate on the account unchanged at 0.11%.
  • Neobank Xinja made a splash with the launch of its savings account. It offers a rate of 2.25% with no conditions attached, and is the top ongoing at-call savings rate in the Mozo database. 
  • Three providers all trimmed their ongoing bonus rates by 5bp - BankVic now at 1.55%, QBANK now at 1.65% and Unity Bank now at 1.60%.
savings accounts january 2020

Term Deposits

While there were a few rate increases for term deposits, once again there were far more rate cuts. For some perspective, it’s worth pausing and considering that January marked the 16th consecutive month where the Mozo database recorded more term deposit rate cuts than increases. The market leader reduced rates across all terms yet still offers better rates than the rest, in some cases by a significant margin.

  • ANZ cut 10bp across the board from both its Term Deposit and Advance Notice Term Deposit Products. Its 12 month rate is now priced at 1.30%
  • CUA increased its key 3, 5, 6, 9 and 12 month terms by 10 to 20 bp, all other terms remain unchanged. 1.80% is now the advertised rate for its 1 year term.
  • Greater Bank presented a mix bag of both increases and cuts between 20 and 5 basis points either direction. Both its 6 and 12 month term is now 1.50%.
  • Market leader Judo Bank cut 10 to 15bp from all terms during January, however it still holds the lead on its competitors by 5bp on a 12 month term (now 1.95%), and a margin of 65bp on a 5 year term (now 2.35%).
  • Suncorp cut between 5 and 20 basis points on the majority of its Term Deposit and flexiRate prices. It the 12 month rate currently advertised at 1.35%
term deposits january 2020

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

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.

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.