Mozo Banking Round Up, September 2020

Although we are yet to hear the RBA’s decision as to whether they will be reducing the cash rate, many lenders are getting in early, making cuts to their fixed and variable rate home loans and trimming their savings rates. 

It was also an interesting month for credit cards, as two of the big four banks launched a new credit card, both resembling a ‘Buy Now, Pay Later’ (BNPL) product. While the other two big banks are yet to make a move, it’s safe to assume that the big banks are trying to keep up with the competition. 

For a more detailed look at all the banking changes the Mozo database recorded in the last month, read on for this month’s installment of the Mozo Banking Round Up.

Key facts

Even as we wait to see if the RBA will give in to temptation and cut the cash rate once more next week, lenders are cutting both variable and fixed ​Home Loan​ rates ever lower.

Two big banks launched very similar ​Credit Cards​, both styled more like ‘Buy Now Pay later’ products than traditional cards. We also saw the end of the last dual card accounts and the return of some Velocity rewards cards.

A mixed bag for ​Personal Loans this month with some cuts and some increases. One of the big 4 lifted its unsecured rate while another launched a large limited time discount.

No waiting around for the RBA on ​At Call Deposit rates either – 3 of the big 4 banks cut rates, along with a number of providers that have had the best rate available at one time or another.

Many of the providers tracked in the Mozo database made cuts to Term Deposit rates last month, driving the average 12 month rate down 7bp.

Home Loans

Rates continue to edge downwards with a mix of variable offers, and improved fixed rates. The best fixed rates are still found in the one and two year terms, but three year rates are not far behind and a frequent price leader has hit the market with a new offer.

For an owner occupier loan of $400,000 making P&I repayments the average variable rate is 3.33{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, for 1 year fixed it’s 2.55{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, for 2 years fixed it’s slightly lower at 2.50{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, and for 3 years it’s 2.57{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. Then it’s a step up to the 4 year average rate at 2.91{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} and the 5 year at 2.94{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}.

Variable Rates

Athena ​Home Loans cut its variable rates between 5 and 15bp, depending on LVR and borrower type. Owner occupier rates now start from 2.34{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (comp rate 2.34{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}*) and investor rates from 2.69{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (comp rate 2.69{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}).

Bank of Queensland ​cut rates on its Economy Home Loan, now starting from 2.59{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (2.76{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*) for LVR’s under 70{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}.

Commonwealth Bank cut its lowest home lending rate during September by 10bp. For owner occupiers, the new rate is 2.69{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, LVR <80{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}. (2.70{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*).

HSBC trimmed 6bp off owner occupier rates for its Home Value Loan, now at 2.59{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (2.60{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*).

ING ​cut 10bp from selected tiers on both its Mortgage Simplifier and Orange Advantage Package products, for owner occupiers paying principal & interest. At 80{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} LVR, the packaged rate is now priced at 2.64{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (2.98{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*).

Well Home Loans ​reduced its leading variable rate by 15bp to 2.17{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (2.20{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*), placing it firmly at the pointy end of the market.

Yard​’s Variable Home Loan Special rate was cut by 20bp to 2.19{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (2.22{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*).

Fixed Rates

AMP reduced its Professional Package 2 year option to 2.19{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (3.13{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*), down 20bp. 

Greater Bank cut its 1 year fixed rates for owner occupiers by 10bp, now at 1.99{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (3.53{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*).

Homestar introduced a 3 year fixed rate at 2.06{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (2.38{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*).

Hume Bank cut its 2 year fixed rate by 15bp, now 2.04{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (4.02{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*).

Macquarie ​cut fixed rates on both its Basic and Offset loan options, with the 1 and 2 year rates down 21bp to 2.19{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (1 year comp rate 2.69{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} for Basic and 2.97{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} for Offset, 2 year comp rate 2.65{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} for basic and 2.93{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} for Offset*) for owner occupiers, and down 45bp to 2.59{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (1 year comp rate 2.97{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} for Basic and 3.23{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} for Offset*) for investors.

Tic:Toc reduced its 2 year rate for owner occupiers by 18bp to 2.09{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} (2.35{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} comp rate*).