This week in banking - Is now the best time to refinance?

In this week’s banking recap, we look at fintech, energy, and the latest reductions made to home loans in the wake of the RBA rate cut.

Aussies flock to smaller lenders post-RBA rate cut

Following the RBA rate cut of last week, we’ve seen 34 lenders make cuts, with 21 of those generously passing on the full 0.25% to their variable home loan customers. All of a sudden, we were looking at rates in the 3.30% range and below from lenders like Athena, Homestar and Reduce Home Loans. So if you’re thinking about refinancing, now is the perfect time.

Reduce Home Loans unveils lowest rate on the market

Reduce Home Loans has emerged as one of the more interesting lenders post-rate cut. Recently, its new Low Rider Home Loan stunned us with it’s 3.09% p.a. variable rate (3.12% p.a. comparison rate*), currently the lowest variable rate on the market.

There is a catch, however. The LVR on the Low Rider Home Loan is 60%, meaning you’ll need to have saved at least 40% of a property’s value to put down as a deposit. That limits this offer to only the most dedicated savers and high income earners.

On top of the fantastic rate, owner occupiers will also be spoilt for features. You’ll be able to choose between weekly, fortnightly and monthly repayments, make free extra repayments, and take advantage of an offset account and redraw facility. 

Savings account cuts already underway

Of course, the downside to all this is that rates for deposits are also set to drop. Already we’ve seen 13 providers make reductions to their range of savings accounts since the RBA’s decision. While the outlook isn’t particularly great for savers at the moment, there are still some worthwhile rates out there, so it pays to shop around.

Aussie energy habits cost the country $7.7 billion

The Energy Efficiency Council has found that Australians’ energy-wasting habits are costing households and businesses $7.7 billion each year, not to mention jeopardising our chances of meeting our 2030 emissions goal.

Just as troubling, an analysis of 25 of the largest energy consuming countries revealed Australia was the worst offender among developed nations.

“Energy efficiency is the single, most powerful tool we have to cut energy bills, improve energy security and address climate change,” said CEO of the Energy Efficiency Council, Luke Menzel.

“If Australia replicated best practice from places like the United States, Germany, Japan and China it would be a game changer for energy affordability and the economy.”

Open banking to pave the way for neobanks

Open banking is set to be rolled out in only a few weeks’ time, and it’s slated to be a game changer for neobanks. By providing customers with greater access to their own data, open banking will make it much easier to switch between banks and take advantage of better rates.

Executive Board Director and Co-Founder of Xinja, Van Le said the technology will herald a new era in banking.

“Open banking is the first cab off the rank in the open data movement, which marks a shift of control of personal data away from corporates, to the consumer - in a climate where there is an expectation that corporates - in this case banks - need to show they will use customer data in the interests of the customers, not just themselves.”

If you’d like to read more about the latest developments in financial technology, be sure to check out our fintech hub. And if you’re looking to make the switch to a lower rate home loan in light of all the cuts, head over to our home loan comparison page for a look at some enticing options.

Home loan comparisons on Mozo - last updated February 27, 2021

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

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

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

    Compare
    Details
  • Basic Home Loan

    Owner Occupier, LVR<80%, Principal & Interest

    variable rate
    comparison rate
    2.64% p.a.
    2.64% p.a.

    Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.

    Compare
    Details
  • Mozo Experts Choice 2020
    UHomeLoan - Discount Offer

    Owner Occupier, Principal & Interest

    variable rate
    comparison rate
    2.34% p.a.
    2.34% p.a.

    Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.

    Compare
    Details
  • Mozo Experts Choice 2020
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

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

    Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^

    Compare
    Details
  • Discounted Variable Home Loan

    Owner Occupier, Principal & Interest

    variable rate
    comparison rate
    2.94% p.a.
    3.34% p.a.

    Enjoy a great low rate with no ongoing fees. Ability to split your loan between fixed and variable. 100% offset account. $2,000 cashback offer for investor & owner occupied home loans over $250k with LVR ≤80% when refinancing to Newcastle Permanent. Limited time offer extended, T&Cs apply.

    Compare
    Details
  • Well Balanced

    Owner Occupier, Principal & Interest, LVR <80%

    variable rate
    comparison rate
    2.17% p.a.
    2.20% p.a.

    Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed.

    Compare
    Details
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*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.


^See information about the Mozo Experts Choice Home Loans Awards

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