Mozo Money Moves: Big Four rates shift for savers as Macquarie home loans take the lead

This week was another bumper week tracking movements in personal finance products, starting with the Mozo Banking Roundup for September 2024 on Monday, which dived into the flurry of cuts across fixed rate home loans and term deposits.

It then followed with NAB cutting term deposit rates, Macquarie slashing fixed rates to jump into the rate leading position, and ANZ shifting savings accounts conditions to offer savers with balances under $5,000 a whopping 5.00%p.a. “no strings” savings rate.

Mozo also revealed the best Car Insurers, Home and Contents Insurers and Landlord Insurers as part of the Mozo Experts Choice Awards, and we released our latest Car Insurance Report for 2024, which revealed premiums are skyrocketing but drivers are reluctant to switch.

Time to dive in!

Fixed rates heat up as Macquarie take the lead

On Thursday, borrowers looking to lock in their home loan were treated to some good news, as Macquarie shook up the fixed-rate landscape with sweeping cuts across the board of between 4 and 50 bps for all borrower types. Macquarie now tops the charts for 2- to 5-year fixed-rate loans for borrowers with LVRs of 70% or less, offering for refinancers seeking stability rates under 5.50%p.a. 

This is what borrowers looking to refinance loans of $500k with loan-to-value ratios of 70% or less can now expect from this major bank:

2-year fixed: 5.39% p.a. (6.02% p.a. comparison rate*)

3-year fixed: 5.39% p.a. (5.95% p.a. comparison rate*)

4-year fixed: 5.39% p.a. (5.89% p.a. comparison rate*)

5-year fixed: 5.39% p.a. (5.84% p.a. comparison rate*)

While Macquarie's 1-year fixed rate of 5.75% p.a. (6.12% p.a. comparison rate*) is just behind The Capricornian's 5.74% p.a., their comparison rate is much more attractive—6.12% p.a. versus The Capricornian's hefty 7.31% p.a. 

“As the comparison rate accounts for the interest rate and additional fees that come with setting up a home loan, it can give you a better idea of the true cost of a home loan over time,” says Wastell.

“So, while Macquarie is second for 1 year fixed rates with a slightly higher headline variable rate, they may actually end up being the more cost effective choice in the long run when you take into account those additional fees and charges.”

“With the RBA cash rate at 4.35%, Macquarie’s fixed rates are hard to beat, almost four cuts ahead of where we are now, which means locking in a fixed rate, or splitting your loan, might be a smart move.”

“However, it's crucial for borrowers to remember that banks set rates based on where they think the market’s heading and fixing could mean missing out if variable rates drop lower during your term.”

NAB Tightens Term Deposit Rates

This week, NAB made some significant moves, following on from previous cuts made back in August, by adjusting its term deposit rates for balances between $5,000 and $1,999,999.

On Wednesday, NAB cut various terms by 5-20 bps, with the most notable reductions of 20 bps applied to its 5-year and 9-month, 10-month and 11-month terms. Additionally, NAB trimmed 10 bps off rates for 90 day, 5-months, 6-month and 7-month rates, while the 8-month term had a smaller cut of 5 bps. Rates for 12-month, 24-month, 36-month, and 48-month terms remained unchanged.

“These cuts follow the slew of cuts we saw in September, and signal that the banks are gearing up for an expected RBA rate cut in the near future,” explains Wastell.

“When banks adjust rates like this, it often reflects their rate move expectations. They want to avoid locking in deposit rates too high, which would lead to paying savers more than necessary if the market starts to shift down.”

“Timing is everything. If you want to maximise your returns, make sure you’re compare your options across banks and terms. If you’re considering locking away your savings for a high interest rate, you may not want to wait too long, as cuts are likely to continue as we approach the first RBA cut following  the most aggressive rate hiking cycle since the early 90s.” 

ANZ Plus revamps savings accounts

This week, ANZ Plus has given its savings accounts a complete makeover, attempting to make the process of saving easier for its customers, with a new tiered rate structure. 

Under the revamped ANZ Plus’ ANZ Save account, customers can earn a standard base rate of 0.50% p.a. on their total balance. For those who manage to grow their balance by $100 or more each month (excluding interest), there’s also a bonus rate of 4.50% p.a., which brings the maximum interest rate to 5.00% p.a.

ANZ’s brand-new savings account, the ANZ Plus Flex Saver, also offers the same competitive 5.00%p.a. rate, but without the tiered bonus rate structure, and only for balances up to $5,000. After that, the high base rate drops to a much lower 2% p.a.

Following ANZ’s cut to its Online Saver’s standard base rate, the Big Four brand is now offering a base rate of 1.40%p.a. and a maximum rate of 3.65%p.a. In contrast, the digital ANZ Plus Flex Saver account provides a high base rate, albeit limited to those savers with smaller savings balances.

“At first glance, you might think the ANZ Save account belongs to the Big Four ANZ Brand, but it’s actually part of ANZ's digital offering, ANZ Plus, which seems to be positioning itself as the go-to choice for savers seeking higher returns,” says Wastell.

“This strategic move looks like it’s aimed at attracting younger savers with lower balances to their ANZ Plus digital offering - which is an app only account - as the base rate from ANZ looks measly in comparison.”

“The rebranding of the ANZ Save account - actually an ANZ Plus account - may be confusing at first, but it could be a way to connect the overarching ANZ brand with audiences and encourage them to secure the higher bonus rate if they have over five grand in savings and continue to grow their balance each month.”

Mozo analysis: Car insurance premiums jump 16% as Aussies pay $100-300 more a year

On Thursday,  Mozo released a new report revealing a worrying trend: drivers are reluctant to switch and rarely compare car insurance policies, despite skyrocketing premiums.

The report - "Car Insurance Costs: Are You Paying Too Much?" - was based on a comprehensive analysis of 295,346 car insurance quotes from 33 providers, showing average annual premiums jumped 16% year-on-year. According to the analysis, the average car insurance premium across Australia now sits at $1,717, with Victoria leading the nation at an average of $2,139, followed by New South Wales at $1,994. In comparison, Tasmania offered the lowest average premium at $1,301.

“Premiums are not just rising nationally, they vary dramatically from state to state - so if you’re not comparing prices in your area, you could be paying more than you need to," says Wastell.

Mozo also conducted a nationally representative survey to see just how much more drivers were paying in comparison to last year, and whether they were comparing car insurance policies. The research showed these premium hikes are not small, with 47% of Australians experiencing an increase on their car insurance being hit by annual premium rises of between $100-300. 

Despite these steep increases, 66% of Aussies with car insurance hadn’t switched insurers in the past year. Further, while the survey found half of Australian drivers compare car insurance policies annually, a worrying 19% rarely compare, and 11% admitted they have never compared policies at all. 

"That’s millions of Aussies potentially leaving easy money on the table," says Wastell. 

"Shopping around isn’t just about price, it’s also about making sure you’re properly covered. Too often, people stick with the familiar without checking if there’s a better value or higher quality deal out there."

In the awards, Budget Direct took top spot as Australia’s Best Value Car Insurer, as across Australia drivers could save up to $463 a year on average by switching to Budget Direct, with average savings of 28% compared to the average of the 32 other providers analysedⁱ.

NRMA Insurance was named Australia’s Best Quality Car Insurer, standing out for the superior coverage offered to drivers taking out Comprehensive and Comprehensive Plus policies.

To see the other insurers Mozo experts found to offer the best value or highest quality coverage, you can check out the winners of the Mozo Experts Choice Awards for Car Insurance here.

ⁱ33 car insurance providers were compared as part of the Mozo Experts Choice Awards 2024. For the annual savings figure, the comprehensive insurance policy prices were assessed, excluding any optional extras. 

Australia’s Best Home & Landlord Insurers

As part of the extensive insurance policy analysis of the Australian insurance industry, Mozo also analysed which providers were leading the pack to find the best Home & Content Insurers and the best Landlord Insurers.

For homeowners looking to protect what is likely their most valuable asset, Australia Post was awarded Australia’s Best Home and Contents Insurer. For property investors, GIO was crowned as Australia’s Best Landlord Insurer for 2024. The winning insurers were recognised for excelling in both the exceptional value and exceptional quality insurance policies, demonstrating strong price competitiveness and high-quality coverage.

These winning providers are proof that insurers can deliver both competitive pricing and coverage, and therefore set a high benchmark for their competitors.

Key Banking Moves in September 2024

This week, we also released Mozo’s Banking Roundup for September 2024, which details the flurry of rate cuts coming through the Mozo database for fixed rate home loans and term deposits.

Home Loans

Home loan fixed rates continued to drop as new rate leaders competed for borrowers with enticing 2 and 3 year fixed terms. 

In September, the Mozo database tracked over 200 cuts to variable rates and more than 1,300 individual cuts to fixed rates across all borrower types, LVRs, and terms. There were also just over 200 cuts to the standard owner occupier, 80% LVR principal and interest home loan cohort (that Mozo often uses as a reference to look at cuts applying to general borrowers) by the month’s end. 

According to the Mozo database, the average home loan fixed rate has decreased by 16-20 basis points over the past six months, with the most significant movement seen in those 3-year terms.

September Rate Leaders

Variable Rates^

• Owner Occupier: Homeloans360 & Pacific Mortgage Group: 5.89% p.a. (Comparison Rate*: 5.89% p.a.)
• Investor: Police Credit Union: 5.94% (Comparison Rate*: 6.00%)

Fixed Rates^

^Rates accurate as at 30 September 2024 according to the Mozo database. Leading variable and fixed rates for owner occupier, principal & interest home loans at $400,000, 80% LVR.

*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.

Term deposits

Term deposit rates continued to decline in September after rates already dropped below 5.00% p.a. for terms of two years or more in August. While there were a few increases and special rate additions, these were overshadowed by the 218 term deposit rate cuts from 43 providers that came through the Mozo database last month.

At-Call Deposits (savings accounts)

In September, the Mozo database tracked two savings rate changes from Big Four banks, as ANZ and Westpac decreased the base rates on their online saver accounts. 

The Mutual Bank also made headlines with a high special deposit rate of 6.00%p.a. for savers on balances between $50,000 and $100,000. In addition, many banks enhanced their introductory and conditional bonus rates to attract new customers while maintaining headline rates.

Credit Cards

Interest rates on credit cards continued to rise in September, alongside slight fee increases, which Mozo noted in its recent 10 year analysis is part of an ongoing devaluation of the credit card market.

Bendigo Bank raised the Bright card's purchase rate by 200 bps to 11.99%p.a. and Latitude increased rates on its cards by 5 bps to 27.49%p.a. and added an $8 monthly fee on the 28° card. MONEYME also raised its Freestyle Virtual Mastercard rate by 50 basis points to 23.74%p.a.

NAB increased the Low Fee Card purchase rate by 125 bps to 20.99%p.a., raised annual fees on the Qantas Rewards Premium (+$45) and Signature Cards (+$25), while also withdrawing the Low Fee Platinum Card from sale.

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Each month Mozo research "rounds up" the key retail banking changes in the Australian personal finance market, to see what’s changed. Above are the key changes that took place in the first month of Spring across home loans and term deposits, but to see the full range of changes that occurred in September, read the roundup in full.  

You can also subscribe to the roundup here, to get this delivered to your inbox at the beginning of each month.

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