This week in banking - Tic:Toc slashes rates to a market low

Niko Iliakis

Friday 17 May 2019

In this week's banking roundup, we look at the latest batch of home loan cuts - which have kept up pace despite the RBA’s decision to keep the cash rate unchanged - plus more news from the world of banking and finance.

Mozo’s Comfort Spending Report

This week, we released the findings from our comfort spending report, and it turns out that Aussies are spending a mindblowing $25.5 billion a year to pick themselves up when feeling down.

According to the report, boredom was the biggest driver of comfort spending, followed by stress/anxiety and unhappiness. As for the most popular purchases, it shouldn’t be a surprise that clothing tops the list, with takeaway food and chocolate coming in second and third.

Rate cuts put Tic:Toc home loans among cheapest

Home loan rates continued to drop this week, with Tic:Toc headlining the latest round of cuts. The online lender slashed its variable home loan by 0.10%, putting it at a market low of 3.47% (3.48% comparison rate*).

While this only applies to new customers, existing customers will be able to benefit from cuts that were also made to fixed rates. If you lock in a 1 year term, you’ll be treated to a seriously impressive 3.39% fixed rate (3.56% comparison rate*).

ScoMo’s first home buyers scheme

With the federal election just a few days away, Scott Morrison has unveiled a new scheme to help Aussie first home buyers get their foot on the property ladder.

Under this initiative, the government will guarantee the difference in cost required to meet the standard 20% deposit threshold, so long as borrowers have saved at least 5%. This means borrowers won’t have to spring for Lenders Mortgage Insurance, potentially saving them thousands. 

G&C Mutual cuts credit card purchase rates

If you’ve been on the lookout for a new piece of plastic, recent moves by G&C Mutual Bank should get your attention. It just cut the purchase rate on its Low Rate Visa Credit Card by a staggering 2%, making the new rate of 7.49% the lowest in our database.

This follows news that Westpac and St George Group would be hiking purchase rates across a range of their credit cards. Hopefully this won’t become a trend and we’ll see more providers taking cues from G&C Mutual instead.

ME Bank drops rates for owner occupiers and investors

Along with Tic:Toc, we also saw cuts from ME Bank, which reduced both fixed and variable rates across a range of both packaged and unpackaged home loans.

Owner occupiers who sign up for the Flexible Home Loan (Member Package) will be able to take advantage of a low 3.58% p.a. fixed rate (4.26% comparison rate*).

But is now a good time to lock in a fixed rate? Mozo Product Data Manager Peter Marshall says that with potential cash rate cuts just around the corner, the price environment stands to drop much further.

“If the RBA cuts the cash rate by 50bp over coming months we could be seeing variable rates that start with a '2', so it might be worth sticking with a variable rate for now.”

If you want to take a look at some quality variable home loans, check out some of the options below, or head to our variable home loan comparison page for a more comprehensive overview.

*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.

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