Trending Financial News 17 July

Macquarie Bank cuts home loan serviceability test

Macquarie Bank has cut its minimum home loan serviceability assessment rate from 7.25 per cent to 5.3 per cent and increased the buffer rate from 2.25 per cent to 2.5 per cent, effective from today, 17 July.

The change means that borrowers will be assessed on their ability to repay their loan if rates were to rise by 2.5 per cent above the current rate, or to 5.3 per cent, whichever is greater.

A borrower applying for a Macquarie Offset Home Loan with a current variable rate of 3.24 (comparison rate 3.50 per cent) will now be assessed on their ability to repay the loan if rates go up to 5.3 per cent.

Suncorp cuts home loan serviceability test

Suncorp Bank will cut its minimum interest rate test from 7.25 per cent to 5.5 per cent and increase its buffer rate from 2.25 per cent to 2.5 per cent.

A Suncorp spokesperson said: “This change will deliver positive benefits for customers.

“We encourage aspirational home-owners to do their homework, ask questions of their broker or bank and have a clear understanding of what they can afford to repay each month.”

ANZ and Westpac have also reduced their minimum interest rate tests. ANZ’s floor rate is now 5.5 per cent and Westpac’s is set at 5.75 per cent.

Macquarie axes international credit card fees

Macquarie Bank is no longer charging international transaction fees on overseas purchases made using Macquarie credit cards. Macquarie’s transaction account also offers zero fees on overseas purchases. 

“Many of our customers travel overseas and we’re always looking at ways to improve their experience,” said Macquarie’s Ben Perham. 

“We understand that international transaction fees are frustrating, so we’re delighted to announce this change so our customers can use their Macquarie credit card more effectively on the go, wherever they are in the world.” 

Macquarie has also removed the 3 per cent international fee on overseas cash withdrawals made using Macquarie credit cards. The standard cash withdrawal fee still applies. 

Bank watchdog savaged in government review

The banking industry regulator is “slow to respond and tentative,” suffers from a “culture of conformity” and lacks the “enforcement appetite” required to take on the big banks and superannuation companies.

The report of a government ordered review of the Australian Prudential Regulatory Authority (APRA) was released yesterday and called on APRA to be more forceful and public in calling out bad bank behaviour.

The treasurer Josh Frydenberg is expected to commit to more resources and powers to APRA, particularly in relation to its role overseeing the superannuation system.

ANZ credit card rates going up

ANZ Bank is increasing the interest rates on ANZ Rewards Platinum card cards from 18.79 per cent to 20.24 per cent. The cash advance rate will fall from 20.99 to 20.24 per cent. This card is currently offering 50,000 rewards points to approved applicants (terms and conditions apply).

Consumer Law Action Centre director Gerard Brody said banks should explain why interest rates on credit cards have not come down in recent years, despite cuts to the RBA’s official cash rate.

ANZ said they have reduced rates on (in 2017) on the ANZ Low Rate credit card and the low rate platinum card.

ANZ CEO Shayne Elliott told radio station 3AW that the cost of providing credit cards to consumers was high.

The great term deposit rip-off – ten years later

The Australian Securities and Investments Commission will get new powers to intervene and prevent “dodgy” financial products from being marketed and sold to consumers.

The new powers come as a result of a review into the practices of the banks, led by the Commonwealth Bank, to roll over term deposits into lower rate terms without the knowledge of the customer – ten years ago in 2009.

Term deposit holders lost a combined $1 billion according to the regulator.

ASIC took no court action against CBA or other banks despite a review suggesting there had been possible breaches of the law.

A spokesman for Commonwealth Bank told The Age that: “We were among a number of banks that fully cooperated with ASIC’s reviews into the term deposit industry in 2010 and 2013.

“We have implemented a range of recommendations to increase transparency and convenience for our retail term deposit customers.”