Latest news with #Mozo
Daily Telegraph
15-07-2025
- Business
- Daily Telegraph
Rising debts put lives and economy on hold
Debts have nearly doubled for Aussie homeowners in the last decade, according to new data from financial comparison site Mozo. The data reveals that the average home loan size has jumped from $389,939 to $659,922, leaving homeowners spending $71 per day more on their mortgages than 10 years ago. Aussies are also taking out fewer loans, despite incredible population growth over the decade. ABS statistics showed 4,957 less new owner-occupier loan commitments for dwellings had been taken out in the March quarter of this year than the March quarter of 2015. MORE: Stubborn homeowners get huge payout National home loan size, 2015-2025, via Mozo. MORE: Full list: Aus suburbs where your home makes more than you Mozo personal finance expert Rachel Wastell said Australian borrowers are now navigating a mortgage market that looks nothing like it did 10 years ago. 'Borrowers aren't just feeling the impact of 13 rate hikes in under two years, they're carrying the weight of a decade of rising home loan sizes and relentless repayment pressure,' she said. 'Loan sizes are bigger, repayments have nearly doubled, and now people are paying the price.' MORE: Ex-Today host's new move after Portelli disaster Mozo Money personal finance expert and spokesperson Rachel Wastell. Across the states, some borrowers have been hit much harder than others. Tasmania and South Australia have more than doubled their average home loan sizes since 2015, with Tasmania recording the fastest growth in loan sizes nationally (111 per cent over ten years). While NSW's decade-long growth was more subdued in percentage terms, the dollar-value increase – $327,699 – is the largest jump of any state. 'Even if rates fall dramatically, that won't change the fact Australians are now carrying significantly more debt than they were 10 years ago,' Ms Wastell said. MORE: Wild sum Aussie renters are losing each year National monthly mortgage payments 2015-2015, via Mozo. She added that for families trying to manage rising living costs, this can mean putting off major life milestones. 'Not just renovations or home upgrades, but decisions like having kids or changing jobs may need to be rethought as the financial buffer just isn't there anymore,' she said. According to Ray White head of research Vanessa Radar, the loss of disposable income has a ripple effect on the nation's economy. 'As Australians struggle with larger debt obligations, they are more inclined to reduce spending which in turn has a slowing impact on the broader economy,' she said. 'Uncertainty and low sentiment sees decision making pushed out and this 'treading water' effect puts pressure on the economy moving forward.'
News.com.au
15-07-2025
- Business
- News.com.au
Rising debts put lives and economy on hold
Debts have nearly doubled for Aussie homeowners in the last decade, according to new data from financial comparison site Mozo. The data reveals that the average home loan size has jumped from $389,939 to $659,922, leaving homeowners spending $71 per day more on their mortgages than 10 years ago. Aussies are also taking out fewer loans, despite incredible population growth over the decade. ABS statistics showed 4,957 less new owner-occupier loan commitments for dwellings had been taken out in the March quarter of this year than the March quarter of 2015. Mozo personal finance expert Rachel Wastell said Australian borrowers are now navigating a mortgage market that looks nothing like it did 10 years ago. 'Borrowers aren't just feeling the impact of 13 rate hikes in under two years, they're carrying the weight of a decade of rising home loan sizes and relentless repayment pressure,' she said. 'Loan sizes are bigger, repayments have nearly doubled, and now people are paying the price.' Across the states, some borrowers have been hit much harder than others. Tasmania and South Australia have more than doubled their average home loan sizes since 2015, with Tasmania recording the fastest growth in loan sizes nationally (111 per cent over ten years). While NSW's decade-long growth was more subdued in percentage terms, the dollar-value increase – $327,699 – is the largest jump of any state. 'Even if rates fall dramatically, that won't change the fact Australians are now carrying significantly more debt than they were 10 years ago,' Ms Wastell said. She added that for families trying to manage rising living costs, this can mean putting off major life milestones. 'Not just renovations or home upgrades, but decisions like having kids or changing jobs may need to be rethought as the financial buffer just isn't there anymore,' she said. According to Ray White head of research Vanessa Radar, the loss of disposable income has a ripple effect on the nation's economy. 'As Australians struggle with larger debt obligations, they are more inclined to reduce spending which in turn has a slowing impact on the broader economy,' she said. 'Uncertainty and low sentiment sees decision making pushed out and this 'treading water' effect puts pressure on the economy moving forward.'
ABC News
06-07-2025
- Business
- ABC News
Potential 'market meltdown' a reason for as many as four RBA interest rate cuts
The potential for lower interest rates has put a spring in Nia Pandoulis's step. She runs Soult Australia, based in Sydney, selling clothing and accessories for the warmer months of the year. "We create things that you would take to Europe, you would take to the beach, you would take to that holiday," she said. Ms Pandoulis juggled a full-time job with her fashion side hustle and hoped lower interest rates would help transform it into a larger business. "I think our consumers would have a lot more confidence in what they're buying and what they're looking to buy. "And we, as a business, would benefit without those additional costs. "If we want to grow and get ourselves out there in that market, we would really benefit from [lower interest rates]." Ms Pandoulis is among millions of Australians hoping for interest rate relief this week. The Reserve Bank is widely tipped to drop interest rates by a quarter of a percentage point to 3.6 per cent on Tuesday, and all big four banks are now forecasting a quarter of a percentage point cut to the cash rate. According to interest rate comparison website Mozo, this means owner-occupier borrowers with a $500,000 mortgage could save $76 a month, or $918 over a year, on their home loan repayments. This is based on the average variable home loan rate of 6.15 per cent per annum in the Mozo database for owner-occupiers, paying principal and interest with an 80 per cent loan-to-value ratio. Economists say lower inflation and gathering global economic storm clouds are supporting the case for a Tuesday interest rate cut. "It looks like a no-brainer that the Reserve Bank's going to cut the cash rate again at its July board meeting," AMP deputy chief economist Diana Mousina said. "The cash rate is currently at 3.85 per cent. There's more than a 90 per cent chance priced into financial markets … that we will see that cut to 3.6 per cent." Ms Mousina said AMP expected several interest rate cuts to follow later this year. In the statement accompanying the RBA's May interest rates decision, the RBA's Monetary Policy Board noted "a severe downside scenario". "[It] noted that monetary policy is well placed to respond decisively to international developments if they were to have material implications for activity and inflation in Australia," the statement said. Ms Mousina said a major financial market correction was possible, which would further support the central bank's case for looser monetary policy. "And given that the starting point is already share markets at a record high around the world, increased risk of volatility, investor uneasiness and uncertainty about future economic and trade policy, particularly from the US, you'd have to say there's a very big risk that markets may fall by 10 per cent or 15 per cent." AMP forecasts as many as four RBA interest rate cuts by early next year. "And then one in early 2026. "That means that we're expecting the cash rate to reach a bottom of 2.85 per cent, and that's close to our estimate of where we think the neutral level of interest rates is. "That's the sweet spot that the Reserve Bank wants to reach." The "neutral level" of interest rates is where the Reserve Bank perceives total demand in the economy equals supply, and there is no upward or downward pressure on price growth for goods and services. Other economists are not so confident the Reserve Bank will drop interest rates. Independent economist Sherman Chan thought the Reserve Bank might wait until August. "The Reserve Bank has made it pretty clear that the quarterly CPI series is their preferred measure [of inflation], so there is a chance they may wait until the June quarter CPI data before they decide," she said. "That would be in August." Whether or not the Reserve Bank lowers interest rates on Tuesday, it is likely the central bank will lower interest rates further in the months to come. That is potentially disappointing for Australians looking to get a foot on the property ladder. "Since rates started to decline, we've seen cities like Sydney, Melbourne, Brisbane and Perth up more than 2 per cent," said Cotality's head of research Eliza Owen. "[Also] Adelaide almost up 2 per cent, but the biggest benefactor has been Darwin — up 6 per cent." Property prices, she said, could go higher as interest rates fall. "It's pretty likely that if you see a reduction in interest rates, you're going to see an increase in housing values," Ms Owen said. "A reduction in interest rates is kind of like a price cut on the cost of debt. It is a bitter pill for Nia Pandoulis, who is hoping to be able to buy a property at some point in the future. "I do want a home one day," she said. "Especially for our generation, we've already got our HECS debts, we're already indebted from our 20s, and then we're working full-time jobs, and maybe we're starting up businesses. "So the prospect of a home is really not on the cards right now. "As someone in Sydney, I think the reality is that it would get pushed further and further out, and I would like to stay where I grew up." The Reserve Bank will announce its decision on interest rates Tuesday at 2:30pm AEST.
Daily Mail
04-07-2025
- Business
- Daily Mail
Banks warn Aussies of shock rate cut twist that could hit homeowners hard
Even if the Reserve Bank delivers a rate cut next week, homeowners can't expect to receive the benefits in full, an expert has warned. Australia's four biggest banks are all expecting another interest rate cut from the RBA's decision due before July 8, which would bring the cash rate to 3.6 per cent. After four years of persistently high interest rates, lenders were eager to pass on rate relief in full - but almost no major lender did so in either February or May. But, according to Mozo finance expert Rachel Wastell, fewer lenders are likely to follow suit as interest rates keep easing. 'Borrowers can't afford to assume their bank will do the right thing, and borrowers should watch their lender like a hawk, especially if their rate starts with a six,' Ms Wastell told Daily Mail Australia. She cited the rate-cutting cycle in 2019 as an example, noting that in June, more than half of lenders passed on the full 25 basis point cut. Just a month later, in July, only 15 per cent did the same. By October, the share of lenders who passed on the full cut dropped to just nine per cent. A similar pattern played out during the pandemic, when only 13 per cent of lenders tracked by Mozo chose not to pass on the first emergency cut in March 2020. The second cut, however, was 'barely reflected' in home loan rates, with ANZ as the only major lender to even partially act on the cut. 'We've seen that banks tend to be generous early on, often with the first cut, but then start holding back as they try to protect margins,' Ms Wastell said. She warned borrowers there was no excuse for complacency. 'If your rate still starts with a six after two RBA cuts, it's time to move,' she said. 'Looking back historically at past cutting cycles, lenders are less likely to pass on subsequent cuts.' Since March, the number of lenders offering owner-occupier loans below six per cent tracked by Mozo has risen from 71 to 85. Of owner-occupier loans, paying interest and principal across all loan-to-value ratios, 18 currently offer fixed rates below five per cent. Graham Cooke, head of consumer research at Finder, agreed that lenders tend to drop off as easing cycles wear on but said ongoing cost-of-living pressures could force lenders to cough up. 'What's been really interesting this rate cycle is that all lenders who have passed on the cut have done it in full, twice. This is unprecedented, and likely a result of societal pressure due to the cost of living crisis,' Mr Cooke said. He said the usual trend will likely play out assuming the rate cuts continue for long enough, but lenders would be well-advised to pass on any relief in the near term. 'So - the banks are unlikely to continue passing on the full cut if the cuts continue, but I think there is still so much focus on the cost of living that banks are unlikely to start doing that this month,' he said. 'If there is a fourth cut, however, banks may start to hold back a little.'
News.com.au
01-07-2025
- Business
- News.com.au
Homeowners told to brace for interest rate cut bombshell from banks
Homeowners hoping for further interest rate relief may be disappointed – even if the Reserve Bank makes the landmark decision to cut the cash rate this month, mortgage analysts have warned. The review of previous periods of declining interest rates showed banks had a habit of being generous in passing on the first cut in a rate easing cycle but subsequent cuts were rarely passed on. This pattern was most noticeable during the early onset of the Covid pandemic in 2020, when the Reserve Bank cut the cash rate to a historic low of 0.1 per cent, plus the year prior. Mortgage comparison group Mozo revealed the experience of past cycles did not bode well for current homeowners hoping for their bank to deliver new savings over July. Mozo finance expert Rachel Wastell said history suggested many lenders would probably not pass on the next cut in full. 'Looking back historically at past cutting cycles, lenders are less likely to pass on subsequent cuts,' she said. She pointed to June 2019, when over half of lenders passed on the first full 25 basis point RBA cut in that cycle. Only 15 per cent did the same after the next cut a month later. Just 9 per cent of lenders passed on an additional cut that October. A similar trend played out during the pandemic. The first emergency cut in March 2020 was widely passed on — only 13 per cent of lenders Mozo tracked didn't pass it on in full. But the second cut was barely reflected in home loan rates, with ANZ the only major lender to pass on even part of the cut. The final cut in that cycle — 15 basis points in November 2020, took the cash rate to 0.10 per cent but banks showed even more restraint in passing that savings on, Ms Wastell said. Just under a quarter of lenders didn't pass the November 2020 cash rate cut on in full, and 43 per cent didn't pass it on at all. 'We've seen that banks tend to be generous early on, often with the first cut, but then start holding back as the cycle continues, particularly as they try to protect margins,' Ms Wastell said. Lenders have so far been fairly quick to pass on the two Reserve Bank cuts announced in February and May. Both cuts were broadly passed on in full by lenders, with Virgin Money the only exception in February. Virgin later relaunched its variable home loan range, introducing basic and offset options. 'Not one lender in May followed Virgin Money's playbook and, as of July, no lenders have publicly announced they are withholding the RBA rate cut. 'In fact, (all) of the lenders that Mozo tracks passed on the 25 basis point rate cut to variable rate home loans.' Ms Wastell added that there was a strong chance mortgage products would begin diverge if the Reserve Bank announced a new cut. 'If cuts continue, we may start to see a split in the pack,' she said. 'Borrowers can't afford to assume their bank will do the right thing, and borrowers should watch their lender like a hawk, especially if their rate starts with a six. 'There's no excuse for complacency. If your rate still starts with a six after two RBA cuts, it's time to move.' Mozo analysis also revealed that banks were very quick to pass cash rate cuts to savers but took significantly longer to reduce interest rates for mortgage holders. 'Another thing we're watching closely is savings rate movements. In both February and May, many savings account rates were trimmed before home loan rate cuts were fully passed on. 'That's a tactic we've seen before: lenders move early on savings (where there's less customer scrutiny), and wait a few days, or sometimes a week, to cut home loan variable rates. 'The further we go into a cutting cycle, the more important it is for borrowers and savers to watch their bank more closely.'
