This week in banking - 35 lenders pass on full RBA cut and 5 other things you don’t want to miss

  • The RBA cuts to 0.50%: but which lenders are cutting their home loan rates? 
  • Interest-free loans offered by the NSW government and RateSetter set to help Aussies live greener 
  • Heard of rentvesting? Heritage Bank open new purchasing avenue for first home buyers 
  • Australians still don’t trust the big banks 1 year after the royal commission 
  • Would you swap your car out an electric one? According to the Australian Energy Market Commission it’s the way of the future 
  • When property prices go up and interest rates come down - what borrowers can expect when it comes to buying a home 

All in this week’s banking recap. 

The RBA’s first rate cut for 2020: how are banks responding?  

On Tuesday, the Reserve Bank of Australia (RBA) made its first cut of 2020, and dropped the official cash rate by 25 basis points to a historic low of 0.50%. 

Earlier in February, financial experts were doubtful that the RBA would make the cut, however, since the outbreak of coronavirus global share markets have been in a state of flux, painting a very different picture.  

"The coronavirus has clouded the near-term outlook for the global economy and means that global growth in the first half of 2020 will be lower than earlier expected," said RBA Governor, Philip Lowe, in his post-meeting statement. 

In response to the move by the RBA, 35 lenders in Mozo’s database have announced their intention to pass full rate so far, including all four of the big banks. 

Read full article: RBA cuts interest rates to 0.50% in March, so how will your bank respond? for the full list of lenders who passed on the full 0.25% cut! 

NSW Government and RateSetter team up with zero interest green loan 

Ever thought of going solar to go greener or save on energy bills? Well, now might be the right time to do it. 

The NSW government-owned Clean Energy Finance Corporation has introduced the Empowering Homes Program in partnership with peer-to-peer lender RateSetter. 

The program will provide eligible Aussies access to interest-free personal loans to help them install solar batteries in their homes. 

Customers will have the opportunity to borrow up to $14,000 for a brand new solar battery system, or up to $9,000 for another battery in an existing solar powered system. 

Read full article: NSW government and RateSetter collab to offer zero interest green loans to find out more about how this program works.  

Heritage Bank opens its gates to ‘rentvesting’ first home buyers 

Saving for a deposit to fund your first property can be tough, especially with soaring house prices - just ask any aspiring first home buyer. But there is a new ‘rentvesting’ trend emerging, and home loan lender Heritage Bank is jumping on the bandwagon. 

A ‘rentvestor’ refers to a first home buyer who opts to purchase an investment property in a more affordable area, while paying rent in the area they wish to live in. 

So where does Heritage Bank come in? Well, the lender has decided to expand its previously owner-occupier only Family Guarantee loan to investors as well. 

Under the guarantee, the total borrowed amount is split between two loans - one secured against the home you are buying and the other partially against a family member’s property. This means borrowers with a deposit lower than 20% can avoid Lenders Mortgage Insurance as well as limiting the amount being guaranteed by a family member. 

Read full article: Heritage Bank opens new home buying avenue to ‘rentvestors’ to see how you could access the Family Guarantee offer. 

Trust for the big 4 still at a low, 1 year on from the Royal Commission 

Trust is one of the most important aspects when it comes to banking, and it seems that the big 4 still haven’t recovered it twelve months after the infamous Royal Commission. 

That’s according to a study done by J.D Power, which unveiled that customer-owned banks ranked higher when it came to trust than the big banks. Respondents to the survey were told to rate each bank or credit union out of 700 for authenticity, and the results revealed that the big 4 banks scored under the 503 average: 

  • CommBank: 489 
  • NAB: 479
  • Westpac: 476
  • ANZ: 474 

It was the smaller players that came out on top, as customer-owned banks such as Heritage Bank (score of 605), People’s Choice Credit Union (score of 576), Bendigo Bank (score of 573) and CUA (score of 557) proved to be the most trustworthy of the lot.  

Read full article: 1 year on from the Royal Commission and Aussies still don't trust the big 4 to check out which trustworthy banks took home 2020 Mozo Experts Choice Awards.

Electric cars to dominate Aussie roads, says the Australian Energy Market Commission 

You may start to see more charging stations and electric car-filled highways, as Australia starts to prep for an electric vehicle (EV) dominated future. 

According to the Australian Energy Market Commission Acting Chief Executive, Suzanne Falvi, the sales of EVs jumped by a whopping 200% between 2018 and 2019. That’s over 6,700 vehicles sold in 2019. 

“We need to lock in lower cost ways to support consumers who want them...if we get ahead of the curve, we can make sure this technology makes a positive contribution to our future power system,” she said.

The Commission said that making the switch to an EV would positively impact the market as it would give Australian households greater ability to control over the way their energy was distributed in their home, as customers are able to charge their vehicle when energy is cheap and sell it back to the grid when it becomes more expensive. 

Read full article: Australia warned to gear up for an electric vehicle dominated future for some quick facts about electric vehicles. 

One up, one down: what Aussie property prices and interest rates mean for borrowers 

Aussie house prices are starting to rise again, but home loan lenders are cutting rates - so is this good news or bad for borrowers? 

In CoreLogic’s latest Hedonic Home Value Index, it revealed that housing values across the country climbed up by 1.1% from last month. 

Across most of the capital cities there was an increase in property value, with Sydney and Melbourne seeing the biggest year on year hike, with 10.9% and 10.7% growth respectively. 

For Aussie borrowers, this could signal a good time to jump into the property market or take out a home loan, as mortgage rates are at an all time low - particularly following the RBA cut on Tuesday - and house prices are predicted to continue rising.   

Read full article: Property prices jump, mortgage rates drop: what it means for Aussie borrowers for the full rundown of property prices across all Australian capital cities and what CoreLogic’s Head of Research, Tim Lawless predicts for future growth.  

Want to weigh up your mortgage options? Jump over to our home loan comparison tool or check out the table below!

Home Loans 2020 - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Awards for 2021.

    Go to site
  • 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.

    Know exactly what your repayments will be, and you can fix your rate for up to 5 years. No monthly, annual fee or transaction fees.

    Go to site
  • placeholder

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    1.85% p.a.
    fixed 3 years
    2.24% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

    Go to site
  • placeholder
    Mozo Experts Choice 2021
    Variable Home Loan Special

    Owner Occupier, Principal & Interest, LVR <70%

    interest rate
    comparison rate
    2.09% p.a. variable
    2.12% p.a.

    Yard’s low-rate variable special home loan is packed with all features – unlimited additional repayments, free redraw, 100% offset account. Enjoy a simple online application. Special rate applies to home loan applications submitted by 31st May 2021. Low Cost Home Loan winner in the Mozo Expert's Choice Awards for 2021.

    Go to site
  • placeholder
    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    2.19% p.a. variable
    2.19% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    Go to site
  • 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.

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

    Go to site

*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

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