Mozo Live: RBA rate hold, super-for-housing proposal, personal loans update

It’s been unusually quiet on the personal loan front since the RBA’s February rate cut. We’ve seen plenty of movement in home loans and savings accounts, but personal loan rates just haven’t followed suit, at least not from what we’ve been tracking in the Mozo database.

In fact, we’ve only identified 4 out of 79 lenders who have passed on the rate cuts. Here’s a summary of the (limited number of) movements we’ve seen:

Are these rate cuts enough?

Interestingly, none of these lenders are offering market-leading rates, even after the cuts. The most competitive offers we’re seeing right now are from:

• Unsecured. Harmoney Low Rate Car Loan from 5.76% p.a. (6.55% comparison rate*)
• Secured. Bendigo Bank Green Personal Loan from 5.49% p.a. (5.84% comparison rate*)

Will we see more cuts in the weeks ahead? Anything is possible, but it doesn’t seem likely now that we’re weeks beyond the February cut and another RBA meeting having come and gone with no changes to the cash rate.

That said, you don’t have to take your high rates lying down, as it’s clear there are still a few standout deals on offer. You can compare the latest over on our personal loans hub page.

That’s it from us today. See you back here tomorrow: same time, same place!

In the lead-up to the May federal election, both sides of government have been spruiking policies and promises to the Australian public.

One example is the Coalition's intention to work with Australia's prudential regulator, APRA, to lower the mortgage serviceability buffer in an attempt to enhance the borrowing capacity for many Australians.

• For first homebuyers, a reduced buffer means banks won’t stress-test loans as harshly, potentially increasing borrowing power and making it easier to enter the market.
• For refinancers, it could provide more flexibility, helping those locked out of better deals due to strict lending rules switch lenders and secure lower interest rates.

However, there are risks to consider. Interest rates remain high, and borrowers need to be confident they can manage repayments in the long run. A boost in borrowing power could also drive up property prices, especially in competitive markets.

The Coalition has doubled down on its proposal to let first-home buyers withdraw up to $50,000 from super for a deposit, despite new modelling warning it could drive up property prices by 7.4% to 10.3%, or around $92,500 in capital cities.

Commissioned by the Super Members Council and led by housing economist Professor Chris Leishman, the new study suggests the policy could add pressure to already stretched affordability, with higher mortgage repayments and smaller retirement balances the likely result.

While a lot would need to happen before this becomes policy, it’s never too early to stay on top of where home loan rates are heading. With that in mind, check out the latest rates at our live rates tracker.

A number of savings rates have dropped of late, following the RBA’s February cash rate cut down to 4.10%.

At the time of writing, the average savings rate is just 3.39% p.a.*, as per the Mozo database, so it’s a good time to shop around and make sure you’re doing better than this average. 

The average bonus savings rate is better at 4.41% p.a.* But based on some of the leading savings accounts in our database, savers can still do better. 

The key question is, can they feel secure that current rates will hold for a while? 

Mozo’s banking expert, Peter Marshall says that while some banks may reduce rates further, he would expect most at-call savings rates to stay where they are now until the next RBA move.

"However, some will adjust their competitiveness in the market depending on how much they need to (or don't need to) raise funds to enable further lending," Marshall says. 

"For example, Ubank has already cut its headline savings rate twice since the last RBA meeting, although its rate is still reasonably good."

The RBA next meets May 19 and 20. 

*The rates used in this piece are based on accounts of $10,000. Keep in mind that there are typically requirements to meet in order to secure most savings interest rates.

If you’re keen to compare savings rates be sure to check out our Savings Accounts hub page. 

The vast majority of changes to term deposit rates over the past month have been cuts, including from all four of the major banks, as per the Mozo database. 

This isn’t surprising given the Reserve Bank’s 0.25% cut in late February. But now that the RBA has held the cash rate at 4.10% in April, perhaps term deposits will also hold for a while.

According to Mozo’s in-house experts, there have actually been a few increases but the best rates for most terms are lower now than they were one month ago. Notably, there are none left at 5% or more. 

In summary, here are some of the more notable moves of recent weeks:

• ANZ took 5bp off its 5 month rate, 10bp of its 8, 10 and 11 month rates, and 15bp off its 1 year rate.
• Commonwealth Bank cut its 5 month rate by 5bp, and its 6, 10 and 11 month rates by 10bp. The 10 month special is also down 10bp. 
• Family First Bank had the top 1 year rate a month ago at 5.05%. That’s now been removed and means all rates in the Mozo database are below the 5% mark.
• ING cut its 3 to 5 months and 1 and 2 year rates, but added 15bp to its 7 month option and 10bp to its 9 month option. 
• Judo Bank took 10bp off its 3 month rate but added 5bp to its 6 and 12 month rates, and 10bp to its 9 month, 4 years and 5 years rates. 
• NAB cut 10bp off its 6 and 8 month rates, and 20bp off 12 months.
• Westpac reduced its 11 month special rate by 10bp.

This phase of cutting rates should certainly have savers thinking about their next move.

Be sure to compare some of the leading rates in our database on our Term Deposits hub page.