Weekly banking recap - Home loan hikes, term deposit cuts and the Banking Royal Commission
From home loan hikes, seesawing term deposit rates and the final blow of the Banking Royal Commission Report, it’s been a big week in banking. But if you’ve been a little slack with your finance reading, here’s what you missed.
The Banking Royal Commission report was released
Whether or not you’ve been paying attention to your feed, it would have been hard to miss the fuss around the release of the Banking Royal Commission report.
Aussies across the country were reminded of the sins of many of Australia's banks, including charging customers for services they never received.
But with those sins came 76 recommendations to be implemented to ease the financial pain experienced by Aussies.
Some of the recommendations included:
- Banning overbearing insurance and superannuation selling
- All financial advisers must be registered
- Car dealers are no longer exempt from consumer credit protection laws
- Abolishing advice fees from both MySuper and non-MySuper accounts
Recent home loan hikes came into effect
Yesterday, home loan lenders ING and ME Bank hiked variable rates for existing customers by 15 and 18 basis points, respectively.
While increasing rates was likely a difficult decision for both lenders, it was a direct result of increased funding pressure.
|Provider||What's changed?||Old value||New value|
|ING||Mortgage Simplifier, Owner Occupier, Principal and Interest, LVR 80-90%, from $150,000 to $2,000,000||3.83% p.a.||3.98% p.a.|
|Mortgage Simplifier, Investor, LVR 80-90%, from $150,000 to $2,000,00||4.79% p.a.||4.94% p.a.|
|Orange Advantage (Package), Owner Occupier, Principal & Interest, LVR 80-90%, from $150,000 to $2,000,000||3.88% p.a.||4.03% p.a.|
Other lenders who increased rates included MOVE Bank and Bankwest on their Equaliser Home Loan, which based on the average standard variable rate of major banks, Westpac, ANZ and NAB.
Westpac introduced a cashback offer, MyState Bank said goodbye to theirs
Among the rate hikes there was some good news, with major bank Westpac introducing a cashback offer on their Rocket Investor (Premium Advantage Package) and Rocket Repay Home Loan (Premium Advantage Package).
Customers who purchase a home under the Premium Advantage Package before 31 March, 2019 are eligible for a $1,000 cash rebate.
On the other hand, MyState Bank removed their $1,250 cashback offer across the majority of its home loan products.
So with all the recent home loan hikes, you might be thinking it’s time to make the switch to a better home loan offer, so make your next stop our home loan comparison tool.
Seesawing term deposits
While this week has been tough for homeowners, Aussie savers have also been feeling the sting, with many providers upping short term and cutting long term rates.
AMP’s 3 month term deposit rate jumped from 2.50% to 2.65%, while its 3 year rate dropped from 2.85% to 2.75%.
G&C Mutual Bank also followed along, increasing their 3 month rate by 30 basis points, while cutting their 3 year rate by 10 basis points.
So if you’re thinking you could be getting a better bang for your buck, check out our term deposit comparison tool.