Trending News 6 June

Westpac targets property investors with rebates

Westpac is offering reduced rates and other incentives to try and convince property investors from other banks to refinance with the big bank.

Westpac has cut rates on interest-only home loans (popular with property investors) by 0.35 percentage points and has reintroduced a $2,000 rebate for refinancers with a minimum loan amount of $250,000, according to the Australian Financial Review.

Westpac’s two-year fixed rate (interest-only) for investors is currently set at 4.35 per cent p.a. (comparison rate 6.17 per cent). The rate for a principal and interest loan is 4.09 per cent p.a. (comparison rate 5.71 per cent).

Compare the top home loan products from Australia’s banks, credit unions, building societies and non-bank lenders here.

ANZ Bank lifts one term deposit rate

ANZ Bank has reacted to fierce recent criticism by announcing it will raise the interest rate payable on its 11-month term deposit by 0.80 percentage points. ANZ’s 11-month term deposit now has an advertised rate set at 1.55 per cent p.a. (6/6/19). The highest ANZ term deposit rate now on offer is 2.10 per cent p.a. on four-month terms.

The move to raise the 11-month TD rate is “to provide an attractive option for savers” according to an ANZ Bank statement to media. ANZ’s chief executive Shayne Elliott had earlier said that the bank did not want to “keep hammering” savers.”

ANZ Bank has come under fire from politicians, media commentators and customers for not passing on the full RBA June rate cut to borrowers. ANZ Bank has also fielded questions about its term deposit rates which were cut across the board in early June.

Compare term deposit rates, fees and features from Australia’s major banks, credit unions and other financial institutions here.

Which lender has the lowest home loan rate in Australia?

Australian banks, credit unions and non-bank lenders have been cutting retail home loan rates following the Reserve Bank’s June interest rate cut.

The lowest headline variable home loan rate now on offer from an Australian major home loan lender is 3.19 per cent p.a. (comparison rate also 3.19 per cent) from Reduce Home Loans’ Rate Slasher loan product. The 3.19 per cent rate is a limited time offer that ends on 30 June 2019.

A borrower refinancing to Reduce Home Loans’ 3.19 per cent rate from a big four bank could save more than $120,000 over the life of the loan, according to Reduce.

Athena Mortgage is currently offering 3.34 per cent (comparison rate 3.30 per cent) for refinancers only.

Compare variable rate home loans from all of Australia’s major banks, credit unions and non-bank lenders here.

Centrelink’s deeming rate is “outright theft”

Pensioners are in hardship caused by low interest rates on their savings and a high deeming rate imposed on them by Centrelink, according to the retirees lobby group, Combined Pensioners and Superannuants Association (CPSA).

The Reserve Bank of Australia has cut official interest rates to 1.25 per cent and returns to savers have very low in recent years. However, the government has resisted adjusting the Centrelink deeming rate since 2015 and pensioners are being punished said the CPSA.

Deeming rates are now 1.75 per cent for savings of up to $51,200 (for single pensioners) and $85,000 for couples. Over those thresholds the deeming rate is 3.25 per cent.

“The higher deeming rate is already well above the average term deposit rate,” said Paul Versteege from the CPSA, “Pensioners with term deposits are assessed as earning more money than they are actually getting!”

A Perth couple told The Senior newspaper they had been told by their bank that it is impossible to get the deeming rate on an Australian bank account.

“This amounts to outright theft by the Australian government from age pensioners,” they said.