Trending Financial News 9 September 2019

Westpac takes axe to home loan rates

Westpac has entered the home loan rate cutting war by announcing some extraordinary low rates for first home buyers, owner-occupiers and investors.

Westpac’s Flexi First Option Home Loan rate discount has been increased from 0.75 per cent to 0.90 per cent, effectively delivering a 0.15 per cent rate cut to new borrowers.

The new variable rates start at 3.43 per cent pa (comparison rate 3.44 per cent pa). The new one-year fixed Flexi Option home loan rate is 3.29 per cent (comparison rate 4.05 per cent pa).

Heritage Bank goes under 3%

Australia’s biggest customer-owned bank, Heritage Bank, has announced interest rate cuts for owner-occupied and investor home loans.

Heritage Bank has reduced fixed rate home loan rates by up to 0.30 per cent and some owner occupier rates by up to 0.10 per cent. Investor variable interest rates have come down by up to 0.15 per cent.

Heritage’s lowest rate is now 2.99 per cent pa (comparison rate 6.67 per cent pa) on the Home Advantage Package three-year fixed rate for owner-occupied (P&I).

Auction clearance rates continue to show market turning around

Sydney’s preliminary auction clearance rate for Saturday 7 September 2019 was 83 per cent. In Melbourne the preliminary Auction clearance rate was 76.6 per cent according to CoreLogic.

In Adelaide, Domain reported a preliminary clearance rate of 85 per cent and 65 per cent in Brisbane.

The numbers of properties put up for sale are still well below the same volumes from September 2018.

AMPO Capital chief economist Shane Oliver said prices would not hit the 2017 peak levels this year.

Netbank error strikes on pension day

Some Commonwealth Bank Netbank customers have been caught by a glitch in the recently upgraded app that could have left many without cash on the weekend.

Last Thursday, pension and benefits day for many Aussies who rely on Centrelink, the bank reported that an error message was (wrongly) telling Netbank customers that their transaction or payment to another account had not been successful, leading many to conduct the transaction multiple times.

“We are aware some customers early this morning may have tried making multiple payments and some of these have already been processed to other banks,” the CBA said in an update late Thursday.

“If you are still waiting for a payment to be reversed, please contact us on 13 2221 (option 4, option 3, option 0),” said a CBA update on Friday.

“Our staff will help in contacting the recipient to arrange a reversal.”

New RBA deal could push home prices up

The treasurer Josh Frydenberg and the RBA governor Dr Philip Lowe are currently negotiating a renewed monetary policy agreement. Usually this agreement is finalised and signed within days or weeks of the election of a new government.

The government reportedly wants the RBA to explain why the inflation target of 2 – 3 per cent has been missed during 2018 and 2019. Critics, including Professor Richard Holden of UNSW believe the RBA did not cut rates soon enough in 2019.

A renewed focus by the RBA on inflation could lead to a different approach to interest rates.