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Daily Telegraph
02-07-2025
- Business
- Daily Telegraph
Experts warn: Buyers about to strike as Reserve Bank cut looms
Household savings have hit a record high, but a looming cash rate cut could wipe out the last of the 5 per cent savings deals. Fresh APRA data shows Australians added another $6.3bn to their bank balances in May, pushing total household deposits to $1.62 trillion. The figures come as buyers return to the housing market, encouraged by growing expectations of a July Reserve Bank rate cut and more favourable borrowing conditions. RELATED: Revealed: Bodybuilder's secret $7m+ Melb hide-out Five buyers fought over this Glen Iris gem Inside Wyndham's most wanted family home But high-interest savings accounts are disappearing fast. Just four banks are still offering ongoing rates of 5 per cent or more, according to Canstar. Two providers, BCU and P & N Bank, cut their highest rates from 5.00 to 4.90 per cent last week, reducing the number of 5 per cent products on the market. BOQ's Future Saver account has the highest ongoing rate at 5.10 per cent, but only for customers aged 14 to 35 who meet monthly deposit and spending conditions. Other top accounts with 5.00 per cent offers include ING, Westpac and MOVE Bank. Canstar insights director Sally Tindall said further rate cuts would likely bring the curtain down on high-yield savings options. 'Rates starting with a '5' are fast becoming an endangered species,' Ms Tindall said. 'If the RBA cuts next week, they could be extinct within days.' At the same time, banks are growing their mortgage books. CBA added almost $3bn in residential loans in May, the largest monthly increase among the major lenders. Over the past year, the bank's mortgage portfolio has grown by $34bn. NAB and ANZ also recorded solid growth in the month, up 0.5 and 0.6 per cent respectively. M R Advocacy director and co-founder of Scale Lending Mortgage brokers Madeleine Roberts said more clients were re-entering the market, often with full deposits. 'A lot of our buyers are coming to us with 20 per cent deposits,' Ms Roberts said. 'That shows real discipline, especially considering how expensive life is right now.' Ms Roberts said falling savings rates and the threat of rising prices had pushed many buyers to act. 'There's a real sense of urgency,' she said. 'Some buyers are desperate to get in before rates fall further. 'That's leading to more competition — and in some cases, overpaying.' She said younger buyers in particular were more willing to look at long-term strategies, but warned that rapid purchases could limit future capital growth. 'If you're buying at auction and paying top dollar, you need to think about a 10-year plan,' Ms Roberts said. 'Otherwise, it could take years to make that money back.' Buxton ACOM's Peter Serafino said enquiry levels at open homes had picked up since May. 'We're seeing more buyers and more interest, but not all of it is converting just yet,' Mr Serafino said. 'People who have been saving steadily are starting to feel like it's time to move.' Mr Serafino said move-in ready homes priced between $1m and $2m were performing strongest. 'Anything turnkey under $2m is still seeing solid competition,' he said. Mr Serafino added that falling rates would give many buyers more financial firepower. 'As borrowing power increases, so will prices, particularly if stock levels remain tight,' he said. The Buxton ACOM agent said. sellers, meanwhile, were becoming more realistic. 'A lot of our sellers have already bought, so they're more motivated and open to negotiation,' Mr Serafino said. 'Last year was more about investors cashing out. This year feels different.' With the Reserve Bank meeting due next Tuesday, analysts say the July decision could shape buyer sentiment into spring. Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox. MORE: James Packer's new deal at Melbourne supermarket site Inside 'Hospitality Yoda's luxe Melb home Tragic side of Aus housing crisis exposed
Daily Mail
23-06-2025
- Business
- Daily Mail
NAB issue major blow for millions of Aussies with cash in a bank account
Aussie savers are seeing lower returns after the Reserve Bank of Australia cut interest rates in May. Major banks, including NAB and BOQ have responded by further reducing savings rates. While lower rates benefit borrowers, they're a blow to savers - particularly those building a home mortgage deposit or relying on interest payments for retirement. NAB reduced its Reward Saver rate by 0.05 percentage points, bringing it down to 4.35 per cent. Meanwhile BOQ cut the maximum rate on its account for young adults from 5.25 per cent to 5.10 per cent. Some banks have gone even further than the RBA's 25 basis point rate cut. ING slashed its Savings Maximiser rate from 5.40 per cent to 5.00 per cent on 2 June, a 40 basis point drop. Across the February and May RBA cuts, ING has reduced its rate by a half a percentage point or 50 basis points. research shows the average ongoing savings rate today is 3.07 per cent , while at the start of the year the average rate was 3.40 per cent - a drop of just 0.33 percentage points. Rabobank also made significant reductions, though specific figures were not disclosed. Term deposit rates are falling even faster. The average one-year term deposit rate has dropped from 4.14 per cent on 1 January to 3.52 per cent - a 0.62 percentage point fall in just six months. Sally Tindall, Canstar's data insights director, warned that savers should brace for more reductions: 'While the average savings rate on our database is an uninspiring 3.07 per cent, there are six banks still offering an ongoing savings rate of 5 per cent or more. That said, if the RBA wields its knife again in July or August, savings rates starting with a 5 won't last beyond winter. 'Term deposit rates are, unsurprisingly, falling faster than at-call savings rates, as banks continue to bake in further cash rate cuts into the fixed rate term. 'If you're someone who likes the certainty and security a term deposit can bring, time is of the essence as these rates are likely to keep on falling in the weeks ahead.' Her comments follow an updated forecast from Luci Ellis, Westpac's chief economist and former Reserve Bank official, who has now included two additional interest rate cuts in her 2026 outlook. On top of two 25 basis point cuts to the key lending rate in August and July in 2025, Ms Ellis predicts additional reductions by the central bank in February and May. That would leave the cash rate at a terminal figure of 2.85 per cent, from the current rate of 3.85 per cent, meaning mortgage holders would save $350 a month. The additional cuts could come even earlier, potentially in December and February, if inflation and the labour market unfold even weaker than expected in late 2025, Ms Ellis said earlier this month. Changes to the inflation outlook mean arguments in favour of more cuts in 2026 are building. A faster-than-anticipated fall in immigration will ease rental costs, dragging down inflation, which Westpac now believes will drop below the midpoint of the RBA's 2-3 per cent target by the end of the year. 'We believe that would tip the RBA in favour of cutting the cash rate further,' Ms Ellis said. 'Indeed, if we are right, the RBA might be in for a bit of an 'oh crikey!' moment late this year.' Australia's economy is at risk of a slower-than-expected recovery, as disappointing GDP growth figures in last week's national accounts revealed, amid a 'shaky handover' from public to private spending. 'Consumer spending is tracking weakly, as we expected. We are now starting to see this weigh on business activity. The result is likely to be soggy growth and surprisingly weak wages growth despite apparently low unemployment,' Ms Ellis said. CBA and ANZ predict just two more rate cuts, beginning in August, while NAB is the only big four bank betting on the RBA to cut rates at its next meeting in July. All up, NAB expects three more cuts to the cash rate that would see it fall to 3.1 per cent, down from 3.85 per cent now.
News.com.au
20-06-2025
- Business
- News.com.au
NAB announces second rate cut for savers in a month
NAB has become the latest bank to move on interest rates, cutting the rate of one of its more popular savings accounts. NAB has announced its Reward Savers account has fallen by 0.05 per cent for a new maximum rate of 4.35 per cent, in the second cut in less than a month. It follows a 25 basis points rate reduction on May 23 in line with the Reserve Bank of Australia's official interest rate reductions. Account holders with NAB's Reward Savers will now get a 30 basis point reduction on their money held in the account. Canstar data insights director Sally Tindall described it as a small blow for savers who are already watching their returns slip away. 'It shows that banks don't need a cash rate change to move the goalposts for customers. It's a small move but a disappointing one nevertheless,' she said. According to Canstar, NAB is not the only bank moving on rates, with Australians now having just six banks offering at least one ongoing savings rate above 5 per cent including some young adult accounts and excluding those for children. 'While the average savings rate on our database is an uninspiring 3.07 per cent, there are six banks still offering an ongoing savings rate of 5 per cent or more,' Ms Tindall said. While each of the savings accounts comes with terms and conditions, including deposits and transactions, BOQ Future Super, BCU Bank Boss, P & N Bank Savvy Savers, MOVE Bank Growth Saver and ING Savings Maximiser all still offer rates above 5 per cent. Westpac Life Spend and Save also offers younger Aussies a 5 per cent savings rate, but comes with the major caveat of being for those aged 18 to 29. Ms Tindall warned if the Reserve Bank cuts the cash rate again in July, which the bond market says has an 83 per cent chance of happening, the days of a 5 per cent savings rate could be behind us. 'If the RBA wields its knife again in July or August, savings rates starting with a 5 won't last beyond winter,' she said. 'Term deposit rates are, unsurprisingly, falling faster than at-call savings rates, as banks continue to bake in further cash rate cuts into the fixed rate term. 'If you're someone who likes the certainty and security a term deposit can bring, time is of the essence as these rates are likely to keep on falling in the weeks ahead.'
News.com.au
10-05-2025
- Business
- News.com.au
‘Psychological: Banks slash interest rates out of cycle with RBA cash rate calls
Australian mortgage holders could benefit from cheaper rates, as competition between the banks sees rates fall below a key psychological barrier. ANZ has become the latest bank to make a move on interest rates outside of the RBA's cycle, reducing its fixed rate offering to 5.39 per cent for two years. Friday's sweeping cuts by ANZ mean the bank now offers the lowest one and two-year fixed rates among the big four banks, while NAB has the lowest three, four and five-year fixed rates, after cutting on April 11. These fixed rates are for owner-occupiers paying principal and interest. But in a huge coup for mortgage holders, BOQ and Police Bank both announced new fixed rates at 4.99 per cent breaking through the 5 per cent barrier. Canstar data insights director Sally Tindall while a rate of 5.39 per cent isn't likely to turn many heads, with variable borrowers across the country hanging out for further cash rate cuts, a fixed rate of 4.99 per cent might grab attention. 'A mortgage rate starting with a '4' is a crucial threshold psychologically that could prompt some borrowers to give up their seat on the variable rate rollercoaster. However, by doing so they would be giving up the potential for further cuts in the fixed-rate term,' she said. 'If you are weighing up the option of fixed versus variable, understand what might suit your finances better and make sure you spend time shopping around for a competitive deal.' Ms Tindall said ultimately, this rate slashing is good news for borrowers. 'Two of the big four banks have cut fixed rates within a month of each other and we expect more banks to follow suit, however, lenders will probably have to consider fixed rates in the '4's if they want to get traction,' she said. The move from the financial institutions comes despite the Reserve Bank of Australia holding the official cash rate at 4.1 per cent after April's meeting. The Reserve Bank is widely predicted to cut interest rates by 25 basis points, to 3.85 per cent after they meet on May 19- 20. It comes days after Australia's largest mortgage lender, CBA, made its move on variable interest rate loans to new customers. Wednesday's move by the major bank will see it lower its owner-occupier, principle and interest variable rate loans to 5.84 per cent, in line with Westpac and ANZ. The new home loan rate comes with a few caveats, including it being a digital-only home loan, a 40 per cent deposit and it will only apply to new customers, with existing mortgage holders missing out unless they refinance. Despite the cheaper rates only applying to new customers, Canstar data insights director Sally Tindall described the new rates as 'fantastic' news for mortgage holders. 'This move is fantastic for competition because when Australia's biggest bank cuts its home loan rates it forces other lenders to sit up and take stock of their own,' she said. 'While this new lowest rate from CBA of 5.84 per cent is only for new customers with a 40 per cent deposit, it does not stop existing CBA customers from using this offer as a bargaining chip for their own rate negotiations.'
News.com.au
09-05-2025
- Business
- News.com.au
Banks in rate cut war to woo borrowers ahead of RBA meeting
Another big four bank has taken the axe to its fixed rate home loans, cutting by up to nearly half per cent just 11 days out from the next RBA meeting. In a bid to woo borrowers, ANZ has slashed fixed rates by up to 0.4 percentage points for owner-occupiers, and up to 0.45 percentage points for investors. That takes the bank's lowest fixed rate to 5.39 per cent — the lowest two-year fixed rate of the big four banks. NAB has the lowest three, four, and five-year fixed rates, after cutting a month ago. BOQ and Police Bank have the lowest fixed rates on the market at 4.99 per cent. It follows in the footsteps of NAB reducing its fixed rate on April 11 and Macquarie Bank on April 24. The RBA is widely expected to cut the official cash rate by as much as 50 basis points when it meets again on May 20. State's 15 'supercharged' investor markets revealed data insights director Sally Tindall said the fixed rate mortgage market was finally heating up, with a number of cuts in the past month from big and smaller lenders. 'The bank has one eye on the possibility of cash rate cuts, potentially as soon as 20 May, and another on locking new customers in, using a relatively competitive fixed rate as the hook,' Ms Tindall said. 'While a rate of 5.39 per cent isn't likely to turn many heads, with variable borrowers across the country hanging out for further cash rate cuts, a fixed rate of 4.99 per cent might grab attention.' But it's not just fixed rates that are being cut. The Commonwealth Bank this week dropped its digital variable interest rate to 5.84 per cent — on par with Westpac and ANZ, with only NAB having 6.19 per cent as its lowest. Ms Tindall said a mortgage rate starting with a '4' was a crucial threshold psychologically that could prompt some borrowers to change from a variable rate. 'If you are weighing up the option of fixed versus variable, understand what might suit your finances better and make sure you spend time shopping around for a competitive deal,' she said 'Ultimately, this rate slashing is good news for borrowers. Two of the big four banks have cut fixed rates within a month of each other and we expect more banks to follow suit, however, lenders will probably have to consider fixed rates in the '4's if they want to get traction.' Deloitte Access Economics head Pradeep Philip said the latest inflation data for the March quarter left the door open for the RBA to cut rates this month. 'A May rate cut should not be viewed as the RBA declaring 'mission accomplished' in the fight against inflation,' Mr Philip said. 'Instead, it should be viewed as insurance against any collateral damage a trade war and geopolitical turbulence may cause the Australian economy.' Deloitte Access Economics is forecasting a 50 basis point cut on May 20 followed by another 25 basis point cut this year, which would see the cash rate reduced by 100 basis points including the February cut. Compare the Market economic director David Koch said another rate cut on May 20 would be 'much-needed relief for homeowners buckling under the pressure of expensive loans and high interest rates'. Mr Koch said it was unlikely interest rates would ever be as low as they were during the pandemic, but they should not be as high as they were now. 'Australian homeowners have worn the brunt of the war against inflation,' he said. 'It's high time we had some relief.'
