Trending Financial News 29 January 2020

More borrowers are comparing and leaving the big four

The proportion of the home loan market controlled by the big four Australian banks, Commbank, Westpac, NAB and ANZ, has fallen to its lowest ever level, according to the latest quarterly data from big mortgage aggregator AFG.

Property investors and first home buyers are two groups of home buyers that traditionally are more likely to borrow from one of the big four home lenders.

Refinancers are often courted by non-bank lenders, credit unions and mortgage brokers away from the big four to low-cost or package deal loans.

Now the new market data indicates that investors and first home buyers are turning away from the big four and increasingly looking elsewhere for a home loan. Comparing home loan rates and deals can lead to big savings for borrowers.

Investors turning away from big banks

For the first time ever, more than half of new investor home loans in the September quarter 2019 were secured through non-major banks, reported big mortgage aggregator AFG.

A new high of 36 per cent of first home buyers also “voted with their feet” and chose a non-big four lender for their first home loan, according to AFG.

45 per cent of Principal and Interest home loans were arranged through a non-major, reported Mortgage Business yesterday.

Overall, non-major banks accounted for 47 per cent of all new mortgages lodged in the September 2019 quarter, the highest percentage since 2007. 

Citibank and Macquarie Bank led the non-major lenders in picking up new home loan business from the big four lenders in the September quarter 2019.

Citi currently have fixed home loan rates starting at 2.89% pa (comparison rates up to 5.25% pa).

For borrowers with small deposits, perhaps first home buyers, Citi have variable home loan rates currently set at 3.19 per cent pa (comparison rate 3.57% pa).

Compare these rates with home loan rates from Australian banks, credit unions and other lenders at InfoChoice.

Australia’s top home loan lenders are …

Australia’s top home lenders are the lenders with the most borrowers, the most popular products and the most used home loans.

Commonwealth Bank is Australia’s top lender for home loans.

Commonwealth Bank, Westpac and National Australia Bank are the three biggest ledners and all continue to grow their market share and sell more home loans.

ANZ Bank currently has a $2,000 cash back offer for new home loan business as it seeks to catch up to its big four bank rivals.

Credit cards offering 0% on purchases

Banks and other credit card issuers are competing hard for new business now and offering great credit card offers, lower credit card rates and discounts on fees. A recent development in the credit card market are credit cards offering a zero per cent (0% pa) rate on purchases for up to one year or more.

For example, National Australia Bank’s NAB Low Rate Platinum Visa credit card has a current offer featuring a 0% p.a. rate on purchases for 15 months and 0% p.a. on balance transfers for 15 months with a one off 2% Balance Transfer fee.

You can compare this credit card with other credit cards from Australia’s banks and other card issuers at InfoChoice. Read more about credit cards that charge 0% pa on purchases at InfoChoice.

How to get rich quick

Do you want to know how to get rich quickly? Are you trying to work out how to organise your finances and build wealth fast?

InoChoice can help you get your own everyday banking and finances in order by helping you compare financial products, helping you calculate your costs and make a budget and giving you information to power your decisions.

Here are five quick easy things you can do to manage your money more effectively:

  1. Get a fee-free everyday transaction banking account.
  2. Get the best rate on your savings account.
  3. Set up ‘buckets’ for your savings.
  4. Get rid of consumer debts like credit card debt.
  5. Get a Qantas or Velocity linked credit card.

Read more at InfoChoice about organising your money and building wealth.

The lowest car loan rates in Australia

The cheapest car loans in Australia have low rates and low comparison rates, low or no fees and no hidden or extra charges. The lowest car loan rates now available are under 5 per cent per annum.

InfoChoice now lists car loans and unsecured personal loans with fixed rates starting from 4.19 per cent pa (comparison rate 4.73 per cent pa) for three or four years.

Read more about the cheapest car loans now available at InfoChoice.

What is CTP insurance?

CTP is compulsory third–party car insurance, also known sometimes as “green slip” insurance. It’s the minimum level of insurance that you can be roadworthy with and covers death and injury to other people if you cause a traffic accident.

Each state and territory has its own CTP rules and requirements. In New South Wales you can choose from a panel of insurers while in Victoria, CTP insurance is included in your car registration.

Read more about the different types of car insurance at InfoChoice.

What is Consumer Data Right?

The Morrison government has begun a new inquiry into the delayed Consumer Data Right which aims to assist consumers switch banks, loans and accounts. CDR provides consumers with access to their own card, account and loan data held by their bank and was supposed to start in February but has been pushed back to allow for “additional implementation work and testing.”

The inquiry will be led by Scott Farrell from King & Wood Mallesons and the report of the inquiry will be released in September. CDR is now due to be applied to mortgages from November 2020.

New code of practice for Buy Now Pay Later apps

The Australian Financial Industry Association (AFIA) has released a draft code of practice for the growing ‘buy now pay later’ sector in response to a Senate inquiry which recommended the development of a code of conduct.

AFIA’s Buy Now Pay Later providers include Afterpay, Brighte, flexigroup, Latitude, Openpay, Payright and Zip Co.

The code covers:

  • A commitment to apply “reasonable” late fees.
  • A commitment to cap other fees.
  • Preventing access to BNPL by people under 18 years;
  • Limiting over-commitment by customers;
  • Commitment to never bankrupt a customer
  • Commitment to hardship assistance

Read more about Buy Now Pay Later apps at InfoChoice.

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