This week in banking - Big changes in variable home loan rates

Niko Iliakis

Friday 01 February 2019

Between some continued trends in term deposits and a number of key changes across home loan rates, there's plenty of banking news to report this week. Let’s get right into it.

Fixed home loans

Endeavor Mutual Bank, Bank of Queensland, Heritage Bank, Teachers Mutual and UniBank have all reduced their fixed home loan rates. Endeavor made cuts of up to 0.30%, while the rest made cuts of between 0.10%-0.20%.

Over at Australian Unity, the Wealth Builder Fixed Rate interest only home loan saw decreases of 0.90%. The 3 year fixed rate is now listed as 4.74% (4.65% comparison rate*), down from 5.64% (4.75% comparison rate*).

A handful of banks, however, have raised their fixed rates slightly, including Loans.com.au, Bank First and Bank of us. 

Variable home loans

Last week, we announced that NAB were finally hiking their variable home loan rates, several months after the other big banks first hiked theirs. Its Base Variable Rate Home Loan and saw an increase of 0.16%. It’s now priced at 4.86% (4.55% comparison rate*).

And just the other day, ING announced it will follow suit. The online bank said it will raise rates across all of its variable rate home loan products by 0.15% on February 7.

Elsewhere, Bank of us, Community First Credit Union and Easy Street have raised variable rates for their offerings of home loans by about 0.10%, while Hume Bank and Heritage Bank on the other hand have dropped their rates.

Australian Unity slashed its Wealth Builder by 0.35%, but it was the Wealth Builder Investor Package which saw the greatest reduction. A 0.50% cut now puts it at 4.39% (4.42% comparison rate*).

Suncorp’s cashback offer for refinancers has ended. But now first home buyers can grab $1,000 cashback when they take out a Standard Variable Home Loan that requires Lenders Mortgage Insurance (LMI).

Westpac’s offer of 200,000 Velocity Frequent Flyer Points for home loans $250,000 and over is no longer available. Homestar also made some changes, now only offering the $900 cash back upon settlement to refinancers, instead of all comers.

Personal loans

Hume Bank has knocked 1.00% off its Secured and Unsecured personal loans, which now sit at 6.95% (7.13% comparison rate^) and 11.95% (12.13% comparison rate^) respectively.

Term deposits

For the most part, term deposits continue their steep decline, but there have been some cases where banks have gone in the opposite direction.

ANZ revised rates for its Advance Notice Term Deposit, drastically cutting 5, 8 and 10 month terms by up to 0.70%. As for its regular Term Deposit, rates have dropped across the board by 0.10%-0.20%.

RaboDirect has dropped rates for 4 and 5 year term deposits by 0.20%. It’s still offering market-leading rates though, at 3.00% and 3.20%, respectively.

Macquarie has decided to go against the grain, raising rates across its suite of term deposits by 0.05%-0.25%.

Australian Unity has also increased rates for term deposits, most notably its 9 month rates, which jumped up to 2.65% after a 0.45% increase.

Credit Cards

American Express Essential Credit Cards now offer a $50 Dining Credit when you apply online by 13 March 2019, are approved, and spend $50 or more at Deliveroo or Rockpool Dining Group restaurants within the first month.

The David Jones American Express Card has introduced some new conditions. Instead of earning 20,000 Membership Rewards points when you spend outside of David Jones three times within the first month, you’ll now receive 15,000 points when you spend $750 outside of David Jones within the first three months.

Similar conditions apply to the Qantas Frequent Flyer variant, except instead of 10,000 bonus Qantas points earned, you’ll get 7,500.


*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 or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. 

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