Paul's Insights: Rate cut spells time to shop around
- {{x.value}}
{{ twilioFailed ? 'SMS Code Failed to Send…' : 'Enter verification code' }}
{{ completedStep1 ? 'Start your free 15 day trial now' : content.trialHeading.replace('{0}', user.FirstName) }}
{{ content.upgradeHeading.replace('{0}', user.FirstName) }}
The email address you entered is registered with InvestSMART
Please login to continue
We have sent you an email with the details of your registration.
Looks you are already a member. Please enter your password to proceed
{{ upgradeCTAText }}
Updating information
Please wait ...
Your membership to InvestSMART Group recently failed to renew.
Please make sure your payment details are up to date to continue your membership.
Having trouble renewing?
Please contact Member Services on support@investsmart.com.au or 1300 880 160
You've recently updated your payment details.
It may take a few minutes to update your subscription details, during this time you will not be able to view locked content.
If you are still having trouble viewing content after 10 minutes, try logging out of your account and logging back in.
Still having trouble viewing content?
Please contact Member Services on support@investsmart.com.au or 1300 880 160
Please click on the ACTIVATE button to activate your Intelligent Investor 15-day free trial
Please click on the ACTIVATE button to finalise your membership
Unsuccessful registration
Registration for this event is available only to Eureka Report members. View our membership page for more information.
Registration for this event is available only to Intelligent Investor members. View our membership page for more information.
- You are already registered for this event.
- This event is already full.
- Please select a quantity for at least one ticket.
- {{ i }}
Forgotten password
Please enter your email address below to request a new password
- Verify your email address by clicking on the link we sent to {{user.Email}}
- You now have free access, we look forward to helping you on your financial journey.
Greater Bank for instance is offering 2.99% on a 1-year fixed home loan. Mortgage House has a variable rate of 3.29%. These are loan rates I’ve never seen in my lifetime...63 years!
I certainly wouldn’t be fixing my home loan in the current climate. Interest rates are unpredictable but plenty of economists are forecasting more rate cuts to follow.
What matters right now is that you take a very close look at how your lender has responded to the Reserve Bank’s rate cut. There’s been a massive difference in the willingness of lenders to pass rate cuts on to their home loan customers.
The Commonwealth Bank was quick to cut its variable rate by the full 0.25%. Westpac on the other hand, is only passing on 0.2% to its owner occupier customers, and ANZ has lowered its variable rate by just 0.18%.
On a $400,000 mortgage, a 0.25% rate cut is the equivalent of saving around $60 a month or $720 each year. So it’s a saving worth having.
If you think your home loan lender is holding back on rate savings, pick up the phone and demand a better deal. Talk to a mortgage broker or do your own research to see what else is available in the market.
The flipside to lower home loan rates is that anyone with cash savings is feeling the pinch of lower returns. That makes it equally important to shop around for a decent rate.
Online savings accounts are paying, on average, 2.15%. That’s bound to fall following the Reserve Bank’s rate cut, but here too there’s a big variation on the return your money can earn.
At the higher end of the scale, HSBC is paying 3.10%, and RaboBank has a savings account with a rate of 3.05%. The catch is that both are 4-month introductory specials. For a consistent return, ME Bank’s online saver is paying 2.85%.
Check what your spare cash is earning to see if you could do better. Comparison sites like RateCity or Finder make it easy to find out which banks are paying the top rates.
Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.
Call 1300 880 160
Start a chat
Schedule a call
