Latest news with #RachelWastell
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.'
Yahoo
14-07-2025
- Business
- Yahoo
Major banks slash interest rates despite RBA cash rate hold: 'Not a coincidence'
Numerous banks, including NAB and ANZ, have cut interest rates on term deposit and fixed home loans despite the Reserve Bank of Australia (RBA) holding the cash rate steady. The central bank defied expectations by keeping the cash rate at 3.85 per cent last week, but that doesn't mean lenders aren't moving. NAB cut its term deposit rates today, with decreases of between 5 to 20 basis points across multiple terms. Its 7-month term has been cut by 20 basis points, bringing its leading rate down to 3.80 per cent. Mozo personal finance expert Rachel Wastell told Yahoo Finance the bank was one of 17 banks who had made term deposit cuts following the RBA's decision. RELATED Major banks reveal updated RBA interest rate cut predictions after 'surprise' hold ATO tax return warning for 2 million Aussies over dangerous act Bendigo Bank customers fight against branch closure amid cashless revolution 'When 17 banks, both big and small, slash term deposits within a week it's not a coincidence, it's a signal,' she said. 'Even after the RBA held, the market kept on cutting these forward-looking products, which shows that lenders are most likely preparing for more rate cuts and that the easing cycle is well and truly underway.' Fellow Big Four bank ANZ trimmed its 8-month Advance notice term deposit by 10 basis points on Wednesday, bringing its highest rate down to 3.80 per cent. Other banks that have moved rates downwards include Bank Australia, Judo Bank, and People's Choice. Fixed home loan rates are also falling, with Mozo seeing four lenders cut rates following the RBA decision. On Wednesday, QBANK cut its fixed rates by 20 to 30 basis points, with SWS Bank, Coastline Bank and The Capricornian following suit. Wastell said it was a rate shift and 'both savers and borrowers should take the hint'. 'If banks thought rates were staying put, we wouldn't be seeing term deposits and fixed-rate home loans falling,' she said. 'Fixed rates and term deposits are forward-looking products, so banks adjust them based on where they expect the cash rate (and wholesale funding costs) will go. 'The fact that both big and small lenders are trimming fixed rates across home loans and deposits, even after the RBA paused last week, suggests they're confident further cash rate cuts are coming and want to get ahead of the curve.'The major banks all expect the RBA will cut interest rates at the August meeting. They are then split on how many more interest rate cuts are coming. Here are their current forecasts: CBA: Two more cuts in August and November to bring cash rate to 3.35 per cent Westpac: Four more cuts in August, November, February and May to bring cash rate to 2.85 per cent NAB: Three more cuts in August, November and February to bring cash rate to 3.10 per cent ANZ: Two more cuts in August and November to bring cash rate to 3.35 per cent On a $600,000 mortgage, Canstar calculated two further cuts could see minimum repayments drop by almost $180. If there are four cuts, minimum repayments could drop by up to $350, depending on the timing of the cuts. While further RBA interest rate cuts will be good news for mortgage holders, it has sparked a warning for savers. Wastell told Yahoo Finance the 'window is closing' for savers holding out for a better deal. 'Those peak term deposit rates are already behind us and banks are clearly repositioning for the next phase of cuts. This round of cuts tells us they're betting on more to come, and that even these lower rates won't be around for much longer,' she said. 'If you're thinking about locking in a deposit, now would be the time to move. The banks aren't waiting for the RBA, and the leading rates are only getting lower.'Sign in to access your portfolio
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.'
Daily Telegraph
02-07-2025
- Business
- Daily Telegraph
Major bank slashes interest rates
One of the major banks has made a power move ahead of the next Reserve Bank meeting to decide the cash rate, introducing new offers to entice more mortgage applicants to fix their loans. ANZ this week announced it would be slashing 10-35 basis points off one to five-year fixed home loan rates, a move that has meant it offers the cheapest fixed rates among the 'big four'. It's come as lending data shows few customers are choosing to fix rates amid wide expectations of another cash rate cut in July, followed by subsequent cuts later this year. This means most of the homeowners on variable rates have the power to chase the best deals in the market by refinancing to different lenders. MORE: Homeowners told to brace for rate cut bombshell ANZ's cheapest fixed rates are now 5.29 per cent and 5.19 per cent for one-year and two-year fixed terms, respectively. The move has occurred after a range of smaller lenders earlier slashed their fixed rates to just under 5 per cent. This included Pacific Mortgage Group, which is offering 4.99 per cent for one-year fixed terms, while Easy Street is offering 4.95 per cent for two-year fixed loans, according to Mozo analysis. Variable rates for new customers currently average about 5.74 per cent. Mozo finance expert Rachel Wastell said ANZ's fixed rate offers were likely a 'strategic first-mover play'. 'ANZ is getting ahead of the curve to lock in borrowers who might be contemplating a fixed rate before the RBA acts,' she said. MORE: One in six unit projects now 'ghost' towers 'Inflation data has also shifted expectations and the market now sees rate cuts as more imminent, so ANZ could be capitalising on that shift before the RBA confirms direction. 'By slicing just enough to undercut the other majors, ANZ gets to look competitive without actually joining the below 5 per cent pack. So it could also be a positioning move, just as much as a pricing one.' Canstar data insights director Sally Tindall said ANZ was moving on the assumption more cash rate cuts were imminent. 'This move by ANZ consolidates its lead as the lowest-cost fixed rate lender out of the majors,' she said. 'The bank is factoring in the possibility of further cash rate cuts, which could be coming down the line as soon as next week.' Ms Tindall added that customers were rarely choosing fixed rates. 'ANZ could also be looking to shore up its loan book by locking in more customers on fixed rate deals,' she said. 'The bank's most recent half year results show that just 3 per cent of its residential mortgage book is on a fixed rate contract. 'This means the remaining 97 per cent on variable rates are free to move at any time without major penalties.' Ms Tindall said homeowners considering fixing their rates should keep some perspective. 'While ANZ's fixed rates are streaks ahead of the other big banks, particularly on shorter terms, they're still a far cry from the lowest fixed rates in town, with a total of 13 different lenders now offering at least one fixed rate under 5 per cent,' she said. 'If you're looking to lock in your rate, don't go aiming for one that starts with a 5 or a 6. You should be looking in the 4's.'
News.com.au
02-07-2025
- Business
- News.com.au
Major bank slashes interest rates
One of the major banks has made a power move ahead of the next Reserve Bank meeting to decide the cash rate, introducing new offers to entice more mortgage applicants to fix their loans. ANZ this week announced it would be slashing 10-35 basis points off one to five-year fixed home loan rates, a move that has meant it offers the cheapest fixed rates among the 'big four'. It's come as lending data shows few customers are choosing to fix rates amid wide expectations of another cash rate cut in July, followed by subsequent cuts later this year. This means most of the homeowners on variable rates have the power to chase the best deals in the market by refinancing to different lenders. ANZ's cheapest fixed rates are now 5.29 per cent and 5.19 per cent for one-year and two-year fixed terms, respectively. The move has occurred after a range of smaller lenders earlier slashed their fixed rates to just under 5 per cent. This included Pacific Mortgage Group, which is offering 4.99 per cent for one-year fixed terms, while Easy Street is offering 4.95 per cent for two-year fixed loans, according to Mozo analysis. Mozo finance expert Rachel Wastell said ANZ's fixed rate offers were likely a 'strategic first-mover play'. 'ANZ is getting ahead of the curve to lock in borrowers who might be contemplating a fixed rate before the RBA acts,' she said. 'Inflation data has also shifted expectations and the market now sees rate cuts as more imminent, so ANZ could be capitalising on that shift before the RBA confirms direction. 'By slicing just enough to undercut the other majors, ANZ gets to look competitive without actually joining the below 5 per cent pack. So it could also be a positioning move, just as much as a pricing one.' Canstar data insights director Sally Tindall said ANZ was moving on the assumption more cash rate cuts were imminent. 'This move by ANZ consolidates its lead as the lowest-cost fixed rate lender out of the majors,' she said. 'The bank is factoring in the possibility of further cash rate cuts, which could be coming down the line as soon as next week.' Ms Tindall added that customers were rarely choosing fixed rates. 'ANZ could also be looking to shore up its loan book by locking in more customers on fixed rate deals,' she said. 'The bank's most recent half year results show that just 3 per cent of its residential mortgage book is on a fixed rate contract. 'This means the remaining 97 per cent on variable rates are free to move at any time without major penalties.' Ms Tindall said homeowners considering fixing their rates should keep some perspective. 'While ANZ's fixed rates are streaks ahead of the other big banks, particularly on shorter terms, they're still a far cry from the lowest fixed rates in town, with a total of 13 different lenders now offering at least one fixed rate under 5 per cent,' she said. 'If you're looking to lock in your rate, don't go aiming for one that starts with a 5 or a 6. You should be looking in the 4's.'
