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The Guardian
4 days ago
- Business
- The Guardian
As more Australians save, banks are cutting interest rates for deposits faster than the RBA's offical cash rate
Leading banks are racing to cut interest rates offered to savers, despite the Reserve Bank leaving the official cash rate on hold this month, as households flood banks with deposits. ANZ on Friday cut the full rate on its progress saver account from 3.5% per year to 3.4% despite the RBA leaving its target rate unchanged a week earlier in a shock move. Westpac dropped its reward saver rate by 0.05% in June, taking the bank's total cuts to the rate to 0.65% since February. The RBA has only cut its target rate by 0.5% over that period. Both banks have also cut rates on their alternative savings products over the year, in line with the Reserve Bank. Ubank has slashed its rate by a much greater 0.9% over 2025. On Tuesday, Ubank cut its savings rate to just 4.6%, while adding a temporary bonus for new customers and a higher threshold on account balances. Bendigo Bank dropped its EasySaver rate by 0.1% in July, according to Canstar tracking. Major lenders have cut the rates offered to savers faster than the RBA has cut its own key interest rate since the start of 2024 – narrowing returns paid to customers and boosting bank profits. Rates have fallen further for standard or online accounts, which have no conditions, though conditional bonus account rates are also sliding as banks cut their losses. Only four banks are now offering widely accessible accounts with interest rates of 5% or more, Canstar's database shows. The slide is a sign banks are taking advantage of Australians' high demand for savings accounts instead of competing for deposits, according to Sally Tindall, the data insights director at Canstar. 'Money in the bank is at a record high, so banks aren't having to compete for people's deposits,' she said. 'Australians are absolutely focused on putting their funds away for a rainy day [so] the banks are flush with cash.' Guardian Australia has previously asked major banks about their decisions to trim unconditional savings rates, pushing customers towards conditional rates, before cutting the conditional rates as well. A Westpac spokesperson in June said interest rates were affected by market pressures. Sign up to Afternoon Update Our Australian afternoon update breaks down the key stories of the day, telling you what's happening and why it matters after newsletter promotion 'In making interest rate decisions, we consider a range of factors including the cost of funds and the broader market environment, balancing the needs of both borrowers and savers,' the spokesperson said. Lenders have enjoyed increased freedom to cut rewards for savers as the volume of savings rises, with workers setting aside a rising proportion of their incomes as cost-of-living pressures ease. National data released in May showed the proportion of household income saved rather than spent had risen to its highest level since 2022. The rising share of income dedicated to saving has seen households' deposits in banks soar to a record $1.62tn in 2025, rising by $24bn over the five months to May, data from the banking regulator shows. The Reserve Bank is expected to cut interest rates in August despite surprising markets in July, with economists predicting the cash rate will fall 0.25%. That would see further cuts to interest rates, which would benefit mortgage holders but likely wipe out the handful of savings accounts still offering a 5% annual return, according to Tindall. 'Cash rate cuts are a double-edged sword and we so often see banks [pass] that cut on to savers faster than they do to their mortgage rate customers,' she said.
West Australian
28-05-2025
- Business
- West Australian
The Australian suburbs where it's cheaper to service a mortgage than rent
It is more affordable for young Aussies to service mortgage payments than rent in more than 1000 house and unit markets nationwide, new research has revealed. With most of the country struggling with a cost-of-living crisis, weekly rents have soared 39 per cent over the last five years sitting at a median price of $659 a week, while the median mortgage repayment is $922, the study by Ubank found. In almost a fifth of Australian suburbs, the median mortgage repayment is estimated to be within $100 per week of the median rent, and in 7.7 per cent of suburbs, it is cheaper to pay a mortgage than to rent. The research found there were 495 house markets and 597 unit markets where this was the case. This pattern has seen a rise in 'rentvesting', with those interested in home ownership encouraged to assess their financial position and look to buy in a cheaper area, while continuing to rent in their desired location. 'Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,' Cotality head researcher Eliza Owen said. 'As inner-city home prices have risen, this approach has become more popular, particularly among younger buyers. 'Initially, it might seem counterintuitive to pay both rent and a mortgage, but it depends on an individual or couple's budget, life stage, and desired lifestyle. 'Rentvesting can offer the best of both worlds, allowing them to purchase a property and rent it out to cover some or all of their ownership costs while continuing to rent the home where they live.' A median rent of $659 a week is equivalent to paying a mortgage on a home worth around $590,000. The research points to a Sydneysider paying a median price of $787 a week, the purchase price would be equivalent to $704,000 – a unit in Canterbury, or a house in San Remo. In Melbourne, the median weekly rent of $610 would get a home worth $546,000 or a unit in Narre Warren, or house in Melton South. Brisbane's weekly median rent sits at $678 a week and is equivalent to a purchase of $606,000. This could score a unit in Zilmere or a house in Leichardt. Those living in Perth and paying the median weekly rent of $713 a week could instead put funds into a purchase equivalent to $638,000 for a unit in Jolimont or house in Maddington. A higher number of young Australians are willing to rentvest in order to purchase their first home, NAB Behavioural Economics data found. Ms Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. 'Soaring rents coupled with falling interest rates has seen rent vesting on the rise as a growing number of first homebuyer investors choose to rent where they want to live while buying property in more affordable markets.'
Perth Now
28-05-2025
- Business
- Perth Now
Suburbs where it's cheaper to buy than rent
It is more affordable for young Aussies to service mortgage payments than rent in more than 1000 house and unit markets nationwide, new research has revealed. With most of the country struggling with a cost-of-living crisis, weekly rents have soared 39 per cent over the last five years sitting at a median price of $659 a week, while the median mortgage repayment is $922, the study by Ubank found. In almost a fifth of Australian suburbs, the median mortgage repayment is estimated to be within $100 per week of the median rent, and in 7.7 per cent of suburbs, it is cheaper to pay a mortgage than to rent. The research found there were 495 house markets and 597 unit markets where this was the case. This pattern has seen a rise in 'rentvesting', with those interested in home ownership encouraged to assess their financial position and look to buy in a cheaper area, while continuing to rent in their desired location. Many young people are looking to 'rentvest' in order to own their first home. NewsWire / Gaye Gerard Credit: NewsWire 'Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,' Cotality head researcher Eliza Owen said. 'As inner-city home prices have risen, this approach has become more popular, particularly among younger buyers. 'Initially, it might seem counterintuitive to pay both rent and a mortgage, but it depends on an individual or couple's budget, life stage, and desired lifestyle. 'Rentvesting can offer the best of both worlds, allowing them to purchase a property and rent it out to cover some or all of their ownership costs while continuing to rent the home where they live.' A median rent of $659 a week is equivalent to paying a mortgage on a home worth around $590,000. Cotality head researcher Eliza Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. Credit: Supplied The research points to a Sydneysider paying a median price of $787 a week, the purchase price would be equivalent to $704,000 – a unit in Canterbury, or a house in San Remo. In Melbourne, the median weekly rent of $610 would get a home worth $546,000 or a unit in Narre Warren, or house in Melton South. Brisbane's weekly median rent sits at $678 a week and is equivalent to a purchase of $606,000. This could score a unit in Zilmere or a house in Leichardt. Those living in Perth and paying the median weekly rent of $713 a week could instead put funds into a purchase equivalent to $638,000 for a unit in Jolimont or house in Maddington. Australia's median rent price sits at $659 a week, an increase of 39 per cent over the last five years. NewsWire / Max Mason-Hubers Credit: News Corp Australia A higher number of young Australians are willing to rentvest in order to purchase their first home, NAB Behavioural Economics data found. Ms Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. 'Soaring rents coupled with falling interest rates has seen rent vesting on the rise as a growing number of first homebuyer investors choose to rent where they want to live while buying property in more affordable markets.'
Yahoo
28-05-2025
- Business
- Yahoo
Suburbs where it's cheaper to buy than rent
It is more affordable for young Aussies to service mortgage payments than rent in more than 1000 house and unit markets nationwide, new research has revealed. With most of the country struggling with a cost-of-living crisis, weekly rents have soared 39 per cent over the last five years sitting at a median price of $659 a week, while the median mortgage repayment is $922, the study by Ubank found. In almost a fifth of Australian suburbs, the median mortgage repayment is estimated to be within $100 per week of the median rent, and in 7.7 per cent of suburbs, it is cheaper to pay a mortgage than to rent. The research found there were 495 house markets and 597 unit markets where this was the case. This pattern has seen a rise in 'rentvesting', with those interested in home ownership encouraged to assess their financial position and look to buy in a cheaper area, while continuing to rent in their desired location. 'Rentvesting is a strategy where a person rents a property that suits their lifestyle while owning an investment property that fits their budget,' Cotality head researcher Eliza Owen said. 'As inner-city home prices have risen, this approach has become more popular, particularly among younger buyers. 'Initially, it might seem counterintuitive to pay both rent and a mortgage, but it depends on an individual or couple's budget, life stage, and desired lifestyle. 'Rentvesting can offer the best of both worlds, allowing them to purchase a property and rent it out to cover some or all of their ownership costs while continuing to rent the home where they live.' A median rent of $659 a week is equivalent to paying a mortgage on a home worth around $590,000. The research points to a Sydneysider paying a median price of $787 a week, the purchase price would be equivalent to $704,000 – a unit in Canterbury, or a house in San Remo. In Melbourne, the median weekly rent of $610 would get a home worth $546,000 or a unit in Narre Warren, or house in Melton South. Brisbane's weekly median rent sits at $678 a week and is equivalent to a purchase of $606,000. This could score a unit in Zilmere or a house in Leichardt. Those living in Perth and paying the median weekly rent of $713 a week could instead put funds into a purchase equivalent to $638,000 for a unit in Jolimont or house in Maddington. A higher number of young Australians are willing to rentvest in order to purchase their first home, NAB Behavioural Economics data found. Ms Owen said purchasing may become a more affordable, accessible option than it has been in the past with several predicted interest rate cuts this year. 'Soaring rents coupled with falling interest rates has seen rent vesting on the rise as a growing number of first homebuyer investors choose to rent where they want to live while buying property in more affordable markets.'
Sydney Morning Herald
18-05-2025
- Business
- Sydney Morning Herald
No-ID-necessary accounts make Australians an easy target for cash ‘mules'
International students and non-permanent residents have been targeted by fraudsters for access to their accounts, according to a repor t by the Fintel Alliance, a public-private partnership led by AUSTRAC. The mules can receive between $200 and $500 for use of their accounts, or may receive a commission of up to 10 per cent on the funds received into accounts they operate. This week, this masthead was able to find several Facebook groups offering Australian bank accounts to 'buy, rent or sell'. In one of the online advertisements, an anonymous Facebook user claimed they were offering upfront payments of $350 to buy access to Bendigo or UP bank accounts, $200 for a National Australia Bank (NAB) account or $150 for a Westpac, St George, Ubank, Bank of Melbourne or HSBC account. Brewer, AUSTRAC's Fintel Alliance national manager, said they were detecting advertisements seeking bank accounts to purchase in different languages, and warned those considering partaking in the trade. 'It can be a crime, and it's not a victimless crime, because this money has come from something that has a victim, so someone's been hurt to get this money to then move through your account.' The Australian Federal Police warned those convicted of participating in muling cash can face anywhere from 12 months to life in prison. Digital bank Ubank, owned by NAB, is one of several Australian banks that promotes the ability to open an account within minutes. Last year, a retiree in her 70s discovered that fraudsters had opened two Ubank accounts in her name without the bank viewing any identification documents belonging to her. The third party provided the woman's name, date of birth, address and Medicare card details, but the bank did not require or obtain a copy or record of the actual Medicare card, according to information provided to the Australian Financial Complaints Authority (AFCA). Anne, who didn't want to use her last name because of concerns about her privacy, discovered the identity theft when a 'beautiful pale blue card' from Ubank arrived in the mail in late February last year. She said she was shocked to discover that it had been possible to open an account without any physical documentation confirming her identity. 'This all happened only with the Medicare number. I did not lose the card. I'm appalled that Ubank could get away with such a lack of ID-checking. They received no photo ID, and the banking code didn't help me as a consumer.' Loading Anne complained to AFCA, alleging that the bank had not provided her with satisfactory answers to her questions. AFCA found in favour of the bank, finding that it 'appropriately responded to the complaint … once aware of the fraud'. However, AFCA could not consider Ubank's conduct in opening the fraudulent accounts in the first place, as it falls out of the organisation's jurisdiction. This is set to change next year as a result of new federal laws which could put banks receiving stolen funds on the hook for compensation. 'Currently – and until the change comes into effect in March 2026 – AFCA can only consider the actions of the bank that has the direct customer relationship with the person or entity who has lodged a complaint, so that's the 'sending' bank,' an AFCA spokesperson said. Ubank head of fraud Jacob Donohue described Anne's case as 'an unfortunate example of identity theft, where personal information was compromised outside of the banking channel and used by a criminal without the customer's knowledge'. There is no evidence the accounts opened in Anne's name were used for any scam transactions. Ubank no longer allows Medicare cards as the single identity document to onboard customers, but it does still allow customers to open accounts using a driver license or passport, without requiring a copy of the physical document. This week this masthead was able to set up multiple accounts with Australian digital banks without providing any photo identification. All of Australia's major brick-and-mortar bank brands now require at least one biometric check (such as facial recognition) for new customers opening accounts online, as part of the Australian Banking Association's Scam-Safe Accord. The change was introduced due to recognition that gangs of scammers were opening bank accounts using driver licence and passport numbers stolen in major data breaches. Dan Halpin, whose company Cybertrace specialises in cyberfraud investigations, said he was concerned about several Australian banks that allowed customers to open accounts online using driver licence details without requiring a physical copy of the licence. Loading 'While this approach streamlines the onboarding process, it raises concerns about the ease with which identity fraud can occur, especially considering recent data breaches involving major Australian companies,' Halpin said. 'Higher-level technology such as biometrics needs to be employed during the account opening process.' Of the major banks, NAB and its subsidiaries, which includes Ubank, closed the largest number of mule accounts in the 2024 financial year, shutting down 5669. The Commonwealth Bank closed almost 3000 accounts linked to fraud or scams over the same period, while Westpac closed 2200, a sharp annual rise that they attributed to improved detection capabilities, which drove a 29 per cent decrease in customer scam losses. Ken Gamble, the executive chairman of cybercrime investigation firm IFW Global, said Australian bank accounts remained a critical component of many scams. 'Victims are very nervous about paying money overseas these days, but they're very happy to pay it into an Australian account, so it gives credibility to the relevant scam ... and it lends credibility because it's a major bank, and banks are trusted.' He said he was aware of cases where student money mules had been paid thousands to set up fraudulent corporate bank accounts, which have become more valuable as banks roll out account name verification technology. In one case detailed by federal authorities, $300,000 stolen from a Melbourne woman in a bank-impersonation scam was transferred into 11 separate mule accounts, and then withdrawn from ATMs soon after.
