Reserve Bank rate cuts have not enticed mortgage holders to decrease their repayments."There are about 80 per cent of people in mortgages that are over two years in front of their repayments," said Westpac's chief product officer Jim Tate. "Not because they have actively put more in but they have left their repayments where they are."Mr Tate said there were only 170 houses in financial institution possession across Australia, compared to 400 five years ago.Source: Toowoomba Chronicle
Commonwealth Bank is reporting a booming level of profit this year, as it holds back rate cuts from home owners.CommBank, Australia’s largest home loan lender, is on track for a record full year profit and reported a cash profit of $1.9 billion in the three months to March 31, up 8.5 per cent from the same period last year.CommBank’s margin on loans rose, due to "re-pricing" in the final few months of calendar 2012. The bank cut its standard variable mortgage rate by 0.4 percentage points between October and December, while the Reserve Bank of Australia cut the cash rate by 0.5 percentage points in the same period.Source: News.com.au
The Reserve Bank could keep cutting interest rates as wages growth remains subdued at 3.2 per cent in the year to March.CommSec chief economist Craig James said: "Wages aren't excessive when you compare it with the growth of prices and productivity. It's a win-win result for the economy. It leaves the door open for the Reserve Bank to cut interest rates."Wages are growing at the slowest pace since 2010, at a level well below the central bank's comfort limit of 4 per cent to 4.5 per cent.Source: Australian Financial Review
A Youth eSaver account from CUA is designed as a first savings account for under 18’s.The account has a variable rate of 5.05% p.a. for balances up to $5,000, no account keeping or online transfer fees and a $1 minimum balance. Over $5,000, the interest rate is 3.50% p.a.Family members can pay birthday or pocket money directly into your account by bank transfer (no need for a linked transaction account). The account converts automatically to a standard CUA eSaver account at age 18.Unlike the ‘bonus’ rates on many other youth savings accounts, the CUA Youth eSaver interest rates will not drop suddenly if you fail to make a deposit each month or make a withdrawal.Source: CreditUnionNews.com.au
The latest Reserve Bank credit card figures show that persistently high credit card interest rates are encouraging consumers to reduce their revolving card balances.Credit card balances accruing interest fell 2.4 per cent in March – down from $35.8 billion in February to $35 billion in March. Over the 12 months to March balances accruing interest have fallen by four per cent.The number of cards on issue has increased from 15 million to 15.2 million over the past 12 months, so the average balance accruing interest for each card account has fallen by 5.7 per cent since March last year.Source: Banking Day
ANZ will lower interest rates for standard variable rate mortgages by 0.27 per cent pa from Friday 17 May, to 6.13 per cent pa (6.23 per cent pa comparison rate).The 0.27 per cent pa decrease will save customers about $60 per month or $750 per year for the average home loan of $280,000.ANZ also said that variable rates for small business lending would decrease by 0.25%pa.Source: ANZ
CUA will cut rates across both its fixed and standard variable home loan (SVHL) product suites, with CUA Rate Breaker Package rate changes effective from 17 May and all other rate changes effective from 20 May 2013.Following the Reserve Bank of Australia’s decision to reduce the official cash rate to 2.75%, CUA has cut its SVHL rate by 25 basis points to a highly competitive 5.60% – an average of 57 basis points (BP) lower than the average of the big fours’ SVHL rates.CUA has reduced its three-year fixed rate home loan by 11 basis points to 4.99% and has also cut its three-year fixed rate premium home loan to 5.30%.CUA’s Rate Breaker Package, which discounts its variable home loan rate by 100 BP to the advertised average of the big four’s SVHL rate, will reduce to 5.17%.Source: CUA
RBA official interest rates have been cut by 2 percentage points since 2011 but credit card rates have only fallen 0.12 points. Average interest rate on credit cards is now 17.16 per cent p.a. down from 17.28 per cent when the Reserve began cutting rates in 2011.The chief executive of the Australian Bankers Association, Steven Munchenberg, said credit card rates reflected the high risk of unsecured lending.“It works both ways. Customers get the benefit when the cash rate is going up, they don't see that in their interest, and when the cash rate is coming down they don't see that either,” Mr Munchenberg said.Source: The Age
Aussies are paying hundreds of millions of dollars extra in credit card interest charges unnecessarily because their credit cards are charging a higher rate than the cheapest cards readily available in the marketplace.Average interest rate on credit cards is now 17.16 per cent p.a. Some cards charge interest rates or 22 – 23 per cent on purchases.Credit cards issued by Community First Credit Union charge 9.5 per cent and Bankwest offers a credit card charging 11.9 per cent. Switching to a low rate card from an average card can cut at least a quarter off the average credit card interest bill.The Australian Securities and Investments Commission estimates that credit card holders in Australia pay an average of $807 in interest every year on about $4700 of debt.Source: Sydney Morning Herald