Trending Financial News 6 November

1. Commonwealth Bank raises fees

Commonwealth Bank has raised fees on cheques from $1.50 to $3. Cheques cashed at a branch will also incur a $3 fee.

Staff assisted transactions now cost $3, up from $2.50.

A CBA spokeswoman told News Ltd that customers have more options available to them than ever before.

“We are helping them save $415 million a year through fee-free account options.”

2. Competition fierce in mortgages say big banks

The mortgage market is alive and well with discounting and great deals for borrowers according to ANZ Bank CEO Shayne Elliott and Westpac CEO Brian Hartzer.

“It’s an incredibly competitive market,” said Mr Elliott, “There are literally thousands of mortgage products out there … from big banks, some from small banks, and some from non-bank providers.”

“How do we know it’s competitive?” asked Mr Elliott, “By looking at the discounts and pricing that’s happening in the market. 

3. What rate discounts do banks give to borrowers who ask?

The mortgage market is extremely competitive said ANZ Bank CEO Shayne Elliott yesterday.

Mr Elliott said the level of discounts offered by banks and other lenders to borrowers who ask is increasing.

He said discounts had increased from around 0.70 percentage points to 1.7 percentage points.

“That tells you that competition is alive and well.”

Mr Elliott said many borrowers paid actual rates around 0.30 percentage points below the advertised home loan rate.

4. Commbank says sorry and pays up

Commonwealth Bank has paid 150,000 customers $50 in compensation along with messages saying “sorry from the CBA.”

The compensation follows a massive outage in the bank’s systems two weeks ago that left many customers unable to access their money. The outage has cost the bank $7.5 million in compensation payments.

5. Westpac cuts dividend as profits fall

Westpac has cut its fully franked dividend from 94 cents to 80 cents after profit fell 15 per cent to $6.85 billion.

“This decision was not easy as we know many of our shareholders rely on our dividends,” said a Westpac statement.

Westpac cut 1700 staff during the year. Westpac’s shares were placed in a trading halt as the bank completes a capital raising. 

6. RBA leaves rates unchanged at record low of 0.75%

The Reserve Bank of Australia has left official interest rates unchanged at 0.75 per cent. The ABS last week reported that CPI inflation edged up 0.1 to 1.7%, closer to the RBA’s target band of 2 – 3 per cent.

The governor of the RBA, Philip Lowe said in a statement that recent rate cuts are “supporting employment and income growth in Australia and a return of inflation to the medium-term target range.”

The governor said the RBA is “prepared to ease monetary policy further” and told Australians to expect “an extended period of low interest rates.”

7. Lenders are still cutting rates

The RBA left official rates unchanged this week but banks and other lenders are still trimming interest rates for homebuyers and refinancers.

“Banks and other lenders are still slicing rates and adjusting deals,” said Vadim Taube, CEO of financial comparison site InfoChoice.com.au.

“There are currently 18 variable home loan rates for owner-occupiers starting with a 2,” said Vadim Taube, “and that will grow with this cut from the RBA.”

“It’s increasingly difficult for borrowers to find excuses not to get online and compare their rate with these sub-3 per cent rates at the leading end of the low-rate home loan market.

“Refinancers in particular can get very low rates on low-LVR loans,” said Vadim Taube.

“And buyers can get sub-3 per cent rates for 80 per cent LVR loans.”

8. Fixed home loan rates go under 3%

Borrowers can now lock in sub-3% home loan deals for five years.

Five-year fixed loans with advertised rates under 3 per cent pa are now available said Vadim Taube.

“Borrowers can now lock in sub-3 per cent rates until 2024.

“Investors especially are benefiting from recent rate cuts to investor, fixed and interest-only loans.”

 Low fixed-rate home loan rates now listed on InfoChoice 3/11/19

Lender Fixed Term Rate % pa Comparison rate % pa
UBank 1 year UHomeLoan Fixed (OO, P&I) 2.74 3.33
Well Home Loans 2 year Well Balanced Fixed 2.68 2.84
UBank 3 years UHomeLoan Fixed (OO, P&I) 2.69 3.19
St George / Bank of Melb 4 years Fixed rate Advantage (LVR< 60%, OO, P&I) 2.84 3.63
Citibank 5 years Fixed Rate Loan OOC 2.74 3.26
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