Trending Financial News 8 August

Commbank to savers: brace for more pain

Commonwealth Bank chief Matt Comyn expects the Reserve Bank to cut interest rates by another 0.25 percentage points in 2019, from 1.0 per cent now to 0.75 per cent.

And that will hit savers said Mr Comyn.

“We recognise how difficult it is for the millions of Australians who are dependent on deposit rates for a good proportion or all of their income,” said Mr Comyn.

“Any further reduction in the cash rate will be felt quite sharply by them.”

Last week the ABS reported that inflation in Australia has edged up to 1.6 per cent. Many savings account base rates and term deposit rates are below 1.6 per cent p.a. at the moment. Compare savings account and term deposit rates at InfoChoice. 

Bank of Mum and Dad faces new rules

Parents are putting their own homes at risk to pay for their children’s home deposits and the banking industry regulator is very concerned. And the big four banks have now all clamped down the on the Bank of Mum and Dad.

National Australia Bank, Commonwealth Bank of Australia, ANZ and Westpac Group are now issuing tough terms and warnings for parents, guarantors and co-borrowers about the risks they taking on.

NAB now requires parents to obtain legal advice.

Most Aussies don’t know their home loan rate

Most Aussies don’t know what their home loan interest rate is according to new research from UBank.

25 per cent of Aussies know exactly what their mortgage rate is, up from 15 per cent in 2017 and 64 per cent know approximately what rate they are paying.

11 per cent of home buyers have no idea what their interest rate is

“There are still too many Aussies out there who don’t know their mortgage rate,” said UBank’s Lee Hatton.

“Thousands of dollars can be saved by simply understanding where the best offers are and refinancing.”

40 per cent of survey respondents said they actively look for competitive interest rate offers.

Open Banking laws help consumers switch banks

The government has passed the first stage of its Consumer Data Rights laws, heralding a new era of ‘open banking.’

“Open Banking … will potentially make switching lenders easier,” said financial advisor Edwena Dixon. 

“Effective 1 July this year, consumers have better access to their own data to make it easier to switch lenders in relation to credit cards and transaction accounts.

“By February 2020, mortgages will become part of Open Banking too.”

InfoChoice has put together a simple four-step guide to switching banks.

Suncorp wants to sell more home loans

Queensland based Suncorp Bank has lost home loan market share in the last financial year and has committed to improving the support and services it provides to home loan customers and brokers.

Suncorp reported net profit (after tax) of $175 million. Banking and wealth profits fell 1.4 per cent from last year and home loan sales grew just 0.4 per cent.

“Lending growth has fallen across the industry,” said Suncorp acting CEO Steve Johnston, “So we are no different to the rest of the industry in feeling that impact.”

Right now, Suncorp’s ‘Special Offer Back to Basics Owner Occupied’ home loan (P&I >$150K, 90% LVR) has a variable rate of 3.29 per cent (comparison rate 3.30 per cent).

How much can I save by quitting alcohol?

The average Australian household spends $32.25 per week on alcohol and over one year Aussie households drink through $1,677.00, on average.

If you want to dump the grog for good, the money savings is not the best reason. You will feel the health benefits almost immediately but the money savings are a nice bonus. If you save $1677 in one year, over the next 20 years you will save $33,540 on today’s prices, which is a trip around the world. Check out how you can save even more by giving up the grog with our Dry July feature

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