Mozo Banking Roundup May 2019

Peter Marshall

Monday 03 June 2019

For this month’s Mozo Banking Roundup, our team of experts rounded up all the changes across our database, which totals over 1800 financial products from more than 200 providers.

With an RBA rate cut looming just around the corner, fixed rates on both loans and deposits were on a downward slide all month, along with all the usual interest rate adjustments, new offers and changes happening in the market at any given time.

Keep up to date with the changes across home loans, personal loans, credit cards, savings accounts and term deposits in the May edition below.

Key points

  • An unsettled home loan market with both increases and decreases to variable rates. Fixed rates experience several reductions with one lender offering a rate below 3%.
  • More changes to credit card purchase rates and restructures of bonus point activation schemes was observed last month. Balance transfer and cashback offers continue to be popular sign-up incentives.
  • The few personal loans interest rate adjustments observed during May were reductions mostly.
  • Some reductions, but savings rates mostly held strong during the month with one online bank increasing an introductory bonus rate on offer.
  • Term deposit rates continue to tumble with the majority of both major and minor institutions choosing to price in a reserve bank rate cut ahead of an anticipated decision.

Home Loans 

A mixed bag for home loans over the last few weeks, with both hikes and cuts in variable rates being observed before an anticipated reserve bank interest rate decision. Fixed rate adjustments were more straightforward, with many lenders making substantial reductions and one offering a short-term fixed rate below 3%.

Key Changes - Variable Rates 

  • Aussie increased some variables rates on the Select Standard Variable home loan by 15 basis points.
  • Australian Unity reduced rates by between 5 and 20 basis points on most products, with rates now starting at 3.59% (3.62% comparison rate*) for its Kickstarter Home Loan.
  • Greater Bank increased variable rates by 10 basis points, while the Discount Great Rate for investor with P&I repayments was increased by 20 basis points.
  • Heritage Bank increased rates by 5 basis points for owner occupiers on its Home Advantage Package. Variable rates now start at 3.77% (3.82% comparison rate*) for borrowers of over $700k with an LVR up to 80%.
  • HSBC increased owner occupier rates on the Premier and Home Smart Special by 4 basis points and the Discounted Home Value Loan by 10 basis points, all now 3.69% (3.70% comparison rate*).
  • IMB Bank increased variable rates by 10 basis points, with the Budget Home Loan Special now starting at 3.79% (3.82% comparison rate*).
  • ING reduced rates for owner occupiers by 17 basis points, now starting at 3.64% (3.96% comparison rate*) for Orange Advantage Package customers.
  • Macquarie made cuts to many of the rates on its Basic, Offset and Flyer home loans. The smallest reductions were 7 basis points, while the largest were 26 basis points. Its leading rate for owner occupier is now 3.69% (3.69% comparison rate*).
  • ME Bank reduced Member Package rates with principal & interest repayments by 8 basis points for owner occupiers.
  • RACQ Bank increased Mortgage Breaker variable rates by 16 basis points, with rates for the Choice Package now starting at 4.25% (3.64% comparison rate*) for owner occupiers and 4.71% (5.09% comparison rate*) for investors.
Key Changes - Fixed Rates
  • AMP cut 2 year fixed rates by 6 basis points and 3 year rates by 22 basis points, both now 3.63% packaged (4.88% and 4.79%comparison rates respectively*).
  • For owner occupiers, ANZ made reductions of 30 bp for its 3 year fixed rates, now 3.69% (4.64% comparison rate*) and 20 bp for fixed 5 year rates, currently 3.99% packaged (4.65% comparison rate*). Investor rates saw 6bp cut from 2 year terms, 20bp from 3 year, and 26bp from its 5 year fixed rates.
  • Bankwest cut its Complete Fixed Home Loan product at the 3 year mark by 34bp. Now available at 3.64% (4.42% comparison rate*).
  • Bank of Queensland made owner occupier and investor fixed rate adjustments of minus 15bp for its 2 year fixed. Also adjusted was 3 year fixed rates, where 30bp was cut for owner occupiers, while 20bp was cut for investors.
  • Greater is the first lender offering fixed rates below the 3% threshold, announcing reductions of 50bp for its 1 year fixed rate, pricing it at 2.99% (4.42% comparison rate*). 2 year rates were also cut 20bp, now 3.39% (4.36% comparison rate*), while 3, 4 and 5 year rates were cut 10bp, now 3.49% (4.29% comparison rate*), 3.64% (4.26% comparison rate*) and 3.64% respectively (4.20% comparison rate*).
  • Macquarie made 20bp cuts to its owner occupier 1 year rates and 10bp to its 2 and 3 year fixed rates. A three rate is now priced at 3.69% (3.77% comparison rate*) at an loan-to-value ratio of 80%.
  • ME Bank cut 21 bp from its owner occupier 3 year rate, now 3.58% packaged (4.57% comparison rate*) and cut 26bp from its investor 2 year rate, now 3.88% packaged (4.54% comparison rate*).
  • NAB cut 20bp from its owner occupier, principal & interest 2 year rate, but added 10bp to its investor & interest rates for all terms 1 to 5 years.

Credit Cards 

Further purchase rate changes in May, and some adjustments to both the quantity and method of activating introductory bonus points offers

Key changes 

  • American Express once again ended the 100,000 bonus points offer on its Qantas Ultimate Card, replacing it with a 55,000 Qantas Points incentive. The Velocity Platinum card, however, received a boost to its introductory offer, jumping from 50,000 to 100,000 bonus Velocity Points.
  • Bankwest added 50,000 and 90,000 introductory bonus points offers and first year annual fee reductions to its Qantas Platinum and Qantas World card, respectively.
  • Bendigo Bank’s Platinum Rewards Mastercard received a 100,000 bonus rewards point offer during May.
  • Citi switched out credit card bonus point offers where a smaller number of points were distributed separately over a longer timespan (up to 20 months), to a more conventional lump points offer (100,000 to 150,000 points on its Platinum, Prestige and Signature cards.)
  • Commonwealth Bank made several changes to the introductory offers available for its card suite. Rewards cards received ‘sign-up and spend’ bonus points offers of 30,000 (Awards Standard), 100,000 (Awards Platinum) and 120,000 (Awards Diamond) points. Low Rate and Low Rate Gold cards received $200 cashback on the first $500 of spend. The 12 month 0% purchase rate offer on all cards ended and on its Low Fee Gold card, the standard 3% foreign exchange margin on overseas purchases has been waived.
  • G&C Mutual Bank cut the purchase rate on its Low Rate Visa from 9.49% to 7.49%. 6 HSBC introduced a first year 0% purchase rate offer on its Platinum Credit Card.
  • Following moves by its subsidiaries last month, Westpac increased the purchase rate 25 basis points on its entire suite of credit cards except the Lite Card. Now 20.49% for all rewards card, 20.09% for Low Fee cards and 13.74 for the Low Rate card. Cash advance rates are now 21.49%, an increase of 75 basis points.

Personal Loans 

The few changes in personal loans in May were reductions, with only one lender in our database increasing rates. 

Key Changes 

  • Citi ended a promotional discount on its line of credit Ready Credit lending product. The 2 year introductory interest rate is now 7.90%, up from 5.90%.
  • Heritage Bank reduced the fixed rate on its Car Loan product from 6.99% to 5.49% (6.13% comparison rate^).
  • Hunter United cut the variable rate on its Cracking Car Loan from 6.99% to 5.49% (6.41% comparison rate^).
  • IMB Bank cut 25bp from its fixed Car Loan, now 5.64% (5.99% comparison rate^), 20bp from its fixed Secured Personal loan now 6.69% (7.04% comparison rate^) and 11bp from its fixed Unsecured Personal loan, now 9.79% (11.54% comparison rate^).
  • Police Bank cut 70bp from its fixed Car Loan. Now advertised at 6.49% (6.63% comparison rate^).

Savings Accounts

Comparatively few savings account changes last month compared to term deposits, with the leading savings account continuing to offer rates approaching 3.00%. It remains to be seen how the market will react to a reserve bank rate adjustment. 

Key Changes 

  • AMP increased the introductory offer on its Saver Account from 2.55% to 3.00% for the first four months from new account opening. The ongoing rate of 2.10% for all balances remains unchanged.
  • Bank of Sydney cut a variety of at-call deposit rates during May. It’s SmartNet Account tiered rates are now 0.70% (-10bp) for less than $10,000, 0.80% for less than $25,000 (-15bp) and 1.50% for larger amounts (-50bp). The introductory offer on its SuperRate Account was reduced 50bp to 2.30% and the ongoing rate cut 25bp to 1.50%.
  • BankVic cut its Easyinvest rate from 1.70% to 1.55% during May.
  • Southern Cross Credit Union cut 15bp from both its Dream Saver (now 1.70%) and NetSaver accounts (now 0.70%). The credit union also cut 25bp from the ongoing rate of its Bonus Saver product (now 1.90%).

Term Deposits 

Term deposit rates continue to tumble ahead of an expected cash rate movement. Last month saw the majority of both major and minor financial institutions cut terms across the board. In all, 59 term deposit products were cut with an average reduction of 22 basis points per term. The average 12 month term dropped again from 2.44% to 2.31%. 

Key Changes 

  • Three out of the four major banks made broad cuts to term deposits rates in May. ANZ cut between 10 and 30 basis points on the majority of the terms its Advance Notice product. Commonwealth Bank reduced terms 12 months and above by 20 to 40 bp. NAB made cuts of 5 to 55 bp to the almost all terms offered.
  • The largest across the board term deposit rate cuts from the rest of the market observed were from Bank of Queensland, Bank of Sydney, BankVic, Bankwest, Beyond Bank, BOQ Specialist, Citi, CUA, Gateway Bank, Goldfields Money, G&C Mutual Bank, Heritage Bank, Macquarie, ME Bank, MyState Bank, Rabobank, and RACQ Bank. These cuts generally ranged from 15 to 30 basis points.
  • More modest reductions (5 to 15 bp across a wide range) were seen from the likes of Community First Credit Union, Greater Bank, ING, Newcastle Permanent, P&N Bank, People’s Choice Credit Union, QBank, Rural Bank, The Mutual Bank and UBank.

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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