Savings rates, home loan rates, mortgage holidays: this week’s best banking news

  • Westpac’s market-leading savings rate for under 29s
  • Low mortgage rates, harsh lending conditions and first home buyers 
  • Home loan repayment holidays extended 
  • Business innovation inspires positivity for post COVID-19
  • What a risk-based personal loan could do for you 
  • 44% of Aussies intend to cut spending over the next 6 months 

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

Westpac offers market-leading savings rate for young Aussies 

This week, major bank Westpac introduced a brand new savings account that has young Aussies’ heads turning. 

From July 8, the new Westpac Life account offers a market-leading 3.00% bonus interest rate for customers aged between 18 and 29 years old.

According to the Mozo database, the current average savings account rate sits at a low 0.70% so this is a massive step up but it doesn’t come without conditions to get this top rate: 

  • You need to be 18-29 years old 
  • You must make at least five transactions via a linked Westpac Choice account each month 
  • Your balance must grow by the end of the month
  • High interest only earned on balances up to $30,000 

Bear in mind though, for those you don’t meet the increasing balance criteria, but still make five transactions, they’ll receive a competitive 2.40%.

Read full article: Westpac offers young Aussie savers a new market-leading interest rate to find out more about this hot new product! 

What low home loan rates and harsher lending conditions mean for first home buyers

This week, AMP made a move to determine their home loan variable rates by a customer’s loan-to-value ratio (LVR) instead of loan amount tiers. 

And they aren’t the first Aussie lender to do it. 

Since the emergency RBA cut to 0.25% in March this year, 15 mortgage lenders in the Mozo database have made the change, including Newcastle Permanent, Bank Australia and online lender Athena. 

Essentially, it means that borrowers with higher LVRs, while they may qualify for a particular loan, will be excluded from receiving the lowest rates available. This makes it particularly hard for first home buyers to get the best rates on offer. 

“It’s not an easy time for first homebuyers in terms of getting a loan, but it is an easier time to buy a property, so that’s the tradeoff,” said Mozo property expert Steve Jovcevski..  

He explained that first home buyers seeking lower rates should be “saving as much of a deposit as they can. Because prices aren’t going to skyrocket any time soon, they’ve got a bit of time to do this.”

Read full article: Home loan rates at record low: Could tougher lending rules shut out first homebuyers? to find out what else Jovcevski said about this type of lending. 

Mortgage repayment holidays: struggling Aussie borrowers receive extensions from banks

On Wednesday, major Aussie banks announced they will be deferring paused loan repayments for an additional four months. 

Despite many retail and business customers resuming their loan repayment schedules full (if not, partially), other borrowers are still feeling the financial pinch of COVID-19. 

“This next phase of bank support will avoid a ‘cliff’ for customers in September and give them the breathing space they need to work with their bank and get back on their feet financially” said Australian Banking Association CEO Anna Bligh.

So far 800,000 Australian banking customers have relied on the loan deferral scheme, 60% of which are residential home loans. According to recent Mozo data, these repayment holidays extensions are set to help avert $75 billion in potential home loan defaults. 

Read full article: More support on the way as banks extend mortgage holidays for struggling borrowers

92% of small businesses have hope for the future through innovation

Released this week, the Amazon Launchpad Innovation Report revealed that 92% of Aussie small businesses are feeling resilient despite COVID-19. 

In fact, 28% have used the time as an opportunity to innovate within their business, such as find new revenue streams (27%), launch online eCommerce business (23%), create new products or even transform current ones (18%). 

Similarly, an additional 35% of small businesses claimed that lockdown enabled them to review and re-jig their current business plan, and 38% said it gave them the opportunity to inspire creativity. 

Read full article: Small businesses innovate to beat challenges of 2020 and check out some hurdles that stand in the way of businesses’ ability to change and adapt. 

The benefits of risk-based personal loans 

While it may be thought thatthat risk-based personal loans only benefit customers with good credit, it’s not entirely the case. 

Risk-based pricing or personalised interest rates, refer to the interest rate that a bank calculates according to a customer’s credit rating.  

According to Mozo banking expert, Peter Marshall, this type of lending has become more popular over the past 10 years. He explained that these loans don’t only benefit consumers with a good credit history but also offer an opportunity to borrow for those with a low credit rating. 

“There’s also a benefit to borrowers that might have a low credit rating, because a lot of lenders who offer a single rate may have tighter criteria about who they will give that rate to,” he said.  

“Borrowers with a low credit rating might find themselves locked out of some lenders based on that criteria.” 

Read full article: How a risk-based personal loan could benefit you to find out what David Norman, chief operations officer from online lender NOW FINANCE, says about how risk-based lending works. 

44% of Aussie consumers will cut spending for the rest of the year, says MyState Bank

According to MyState Bank, 44% of Aussies are intending to hold back on spending on non-essentials for the rest of 2020. 

In a recent survey, they found that consumers want to spend less on things like: 

  • Gym memberships: 44%
  • Public transport: 43% 
  • Home furnishing and decor: 38%
  • Takeaway food: 38% 
  • Clothing and footwear: 36% 

Alternatively, the research showed that over 25% of Aussies foresee themselves spending more on both groceries and household utilities over the next six months. 

“For many Australians, the introduction of social distancing measures has been an opportunity to save more than ever before on expenses from public transport to dining out at restaurants,” said Heather McGovern, MyState Bank general manager, customer experience.

“Being isolated has also compelled more Australians to consider new and more innovative and cost-efficient ways of doing things, like swapping out memberships at physical gyms for fitness apps. Our research indicates that Australians are likely to prolong their savvier spending habits even after social distancing measures have lifted.”

Read full article: MyState Bank: 44% of Aussies to reign in spending for the rest of 2020 for five ways to be financially thrifty this year. 

On the hunt for a brand new savings account? Take a look at some competitive options below. 

Compare Savings Accounts 2020 - last updated 20 April 2024

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    High Interest Savings Account

    5.75% p.a. (for $0 to $250,001)

    4.40% p.a.(for $0 to $250,001)

    Yes up to $250,000

    Bonus rate for the first 4 months from account opening

    Reward yourself with a higher rate for your good savings habits with the Rabobank High Interest Savings Account . Receive the maximum rate when you grow your balance by at least $200 each month. No Account keeping fees. No minimum balance.

  • Savings Account

    5.35% p.a. (for $0 to $250,000)

    4.75% p.a.(for $0 to $1,000,000)

    Yes up to $250,000

    Bonus variable rate is available for the first four months.

    Competitive introductory variable rate for first 4 months (on deposits up to $250,000). No account keeping fees to pay. Multiple 2023 Mozo Experts Choice Award winner.

  • Reward Saver Account

    5.25% p.a. (for $0 to $1,000,000)

    0% p.a.(for $0 and over)

    Yes up to $250,000

    Intro bonus rate of 5.25% for balances up to $1,000,000 for the first 4 months, reverting to 3.25%. Minimum deposit of $50 and no withdrawals.

    Introductory bonus rate for balances up to $1,000,000 for the first 4 months. Minimum deposit of $50 and no withdrawals. Start your account online in under 10 minutes and earn interest on balances up to $1,000,000 (T&Cs apply). No monthly account fees, helping you save smarter and faster.

  • Mozo Expert Choice Badge
    AMP Saver Account

    5.40% p.a. (for $0 to $250,000)

    1.20% p.a.(for $0 to $5,000,000)

    Yes up to $250,000

    Enjoy a bonus rate when you deposit at least $1000 per month with the AMP Saver Account.

    No account fees. Unlimited transactions when linked to an AMP Bank transaction account. Easy online access to your money. Option to link your savings account to an everyday transaction account. 2024 Mozo Experts Choice Award winner.

  • Savings+Bonus

    5.00% p.a. (for $0 to $250,000)

    2.00% p.a.(for $0 to $250,000)

    Yes up to $250,000

    Earn a generous interest rate on your at-call savings (T&Cs apply). Interest is calculated daily and paid to you monthly. A $5 monthly membership fee will not apply if your total account balances with First Option Bank exceed $1,000 or you have a credit card or loan with the bank.

  • High Interest Save Account

    5.10% p.a. (for $0 to $250,000)

    0.10% p.a.(for $0 and over)

    Yes up to $250,000

    Deposit at least $200 to either Spend, Bills or Save account from an external source each month.

    No monthly fees on any of your save accounts. Split your money with up to 10 Save accounts. Set savings targets and track the progress of all your Save accounts. Deposits guaranteed up to $250K per customer.


^See information about the Mozo Experts Choice Savings Account Awards

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