Revert rate trap, CommBank Neo, Youi CTP insurance: This week’s best banking news

young couple working out cost of revert rate on fixed rate home loan
  • Fixed home loan revert rate trap: borrowers urged to watch out 
  • Meet CommBank Neo! An interest-free way to use a credit card 
  • Youi now offers CTP insurance to Aussies 
  • APRA approves restricted banking licence for money transfer fintech Transferwise
  • Pensioner’s deposit rates continue to plummet 
  • Here’s the November 2020 Mozo Banking Roundup 

All in this week’s best banking news: editor’s pick. 

What every borrower should know about fixed home loan revert rates right now

Since the Reserve Bank of Australia (RBA) cut its official cash rate last month, mortgage lenders have turned their attention to fixed rates. 

According to the Mozo database, the average 2-year fixed home loan rate sits lower than the variable average at 2.35% compared to 3.31%

Plus, since the RBA rate cut a bunch of lenders have dropped their fixed headline rates to below 2.00% for the very first time. 

However, while these rates are competitive the same can be said for revert rates. Mozo research revealed that revert rates can sit a lot higher than the fixed rate, with the average sitting at 3.49% but ranging up to 5.10%. 

Read full article:
Borrowers urged to avoid costly fixed home loan revert rate trap to read what Mozo Director, Kirsty Lamont says about these findings. 

CommBank Neo: The new interest-free credit card

Three months after the announcement of its new credit card, Commonwealth Bank has introduced the 0% interest card Neo. 

Instead of being charged interest on purchases, customers will simply pay a monthly fee that is determined by their credit limit: 

  • $12 per month for a $1000 credit limit
  • $18 per month for a $2000 credit limit 
  • $22 per month for a $3000 credit limit 

Plus, for those that don’t use their card over a statement period, CommBank will waive this monthly charge. There are also no late fees or foreign exchange charges attached to the card. 

Read full article:
CommBank launches interest-free credit card Neo: here's what you need to know for more info on this new product. 

CTP insurance: Youi the sixth provider in Australia to offer it!

woman-in-car-with-dog-with-Youi-ctp-insurance

Home and motor vehicle insurer Youi joined a crew of six other Aussie insurers to offer New South Wales drivers compulsory third party insurance (CTP). 

CTP or a green slip is a mandatory level of car insurance that drivers must have in order to register and drive their car on the road. 

You can also get this type of insurance from the following insurers: 

  • AAMI 
  • Allianz 
  • GIO
  • NRMA
  • QBE

“Reforms to the NSW green slip market have levelled the playing field and made it possible for new entrants to enter the market,” Youi’s chief executive, Hugo Schreuder said.

“We believe the reforms will support a highly sustainable CTP scheme that delivers better customer outcomes and we saw a strong alignment between its vision for the market and our own customer-focused ethos.”

Read full article:
Youi is now one of six providers offering CTP insurance in Australia for more about the cost of CTP. 

Transferwise gets restricted banking licence from APRA

This week, international money transfer provider Transferwise was approved for a restricted banking licence by the Australian Prudential Regulations Authority (APRA). 

It is the first company in over a decade to receive the licence as a purchased payment facility (PPF) provider. 

What this means is Transferwise is now considered a ‘limited authorised deposit-taking institution’ (ADI), giving the platform direct access to Australia’s real-time payments system: the New Payments Platform.  

Read full article:
Money transfer fintech TransferWise gets restricted banking licence from APRA to see what TransferWise Australia’s country manager, Tim Cameron said about the major milestone. 

Pensioners suffer as deposit rates continue to fall

pensioner in chair looking up fallen deposit rates

Recent Mozo research revealed that on a balance of $53,000, the average pensioner account rate is a low 0.62%. 

This is a massive 1.63% difference from the deeming rate of 2.25%. Plus, those that bank with the big four are even worse off, as the average return ranges from 0.21% to 0.35%. 

“Although the government assumes pensioners are getting at least 2.25% annual return on every dollar over $53,000 in savings or investments to determine their pension income, the numbers tell a different story,” said Mozo Director, Kirsty Lamont.

“Times have never been tougher for pensioners when it comes to generating an income from their savings, so following the third official rate cut this year it’s time the government did the right thing by older Australians and reduced the deeming rate,” said Lamont. 

Read full article:
Pensioners' deposit rates continue to tumble as rates hit an all time low and find out where you can get the to term deposit rates right now. 

Your November 2020 Mozo Banking Roundup 

The end of year is fast approaching - so here’s what happened in the world of banking this November: 

  • Post RBA cut, many home loan lenders left variable rates as they are and focused on their fixed rate offerings. The lowest rate for a 3-year fixed loan is 1.89% and for a 5-year fixed loan is 1.99%. 
  • Credit cards saw a few changes this month, including one rate reduction
  • For personal loans it remained quiet, with some cuts and some increases to rates 
  • At Call Deposit rates saw cuts, as to be expected 
  • Similarly, term deposit rates also decreased, pushing the average 12 month rate to a mere 0.65%. 

  • Want to start comparing some fixed rate home loan options? Check out the offerings below? Or if you simply want to get your finances in order in the lead up to Christmas, check out our December 2020 Financial Checklist.

Compare fixed home loans - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Special Offer Fixed Rate Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    1.99% p.a.
    fixed 3 years
    2.70% p.a.
    Go to site
    Details
  • placeholder
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    1.85% p.a.
    fixed 3 years
    2.24% p.a.
    Go to site
    Details
  • placeholder
    Mozo Experts Choice 2021
    Discount Fixed Rate

    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    1.94% p.a.
    fixed 3 years
    2.97% p.a.
    Details
  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    2.09% p.a.
    fixed 3 years
    2.43% p.a.
    Go to site
    Details
  • placeholder
    Well Balanced Fixed

    Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    1.95% p.a.
    fixed 2 years
    2.17% p.a.
    Go to site
    Details
  • placeholder
    Fixed Rate Loan with Orange Advantage

    Owner Occupiers, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    2.04% p.a.
    fixed 3 years
    3.60% p.a.
    Go to site
    Details

*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.

**Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loans Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

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