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West Australian
23-05-2025
- Business
- West Australian
Australian savers dealt another blow as interest rates fall
Australian savers have been dealt a huge blow, with a second major bank confirming they are slashing interest rates. NAB has become the second major bank to move on savings rates, after announcing both its Reward Saver and iSaver accounts have fallen by 25 basis points, with savers now getting 4.4 and 4.65 per cent respectively. Canstar data insights director Sally Tindall said NAB's move was just the tip of the iceberg for Australians with a savings account. 'This is just the start of what will be an onslaught of rate cuts for savers,' she said. 'It's disappointing to see some banks chop savings rates ahead of their mortgage rates. 'One day, it would be fantastic to see a bank reverse this order to benefit its mortgage and savings customers, rather than themselves.' NAB is not alone in moving on savings rates with Westpac becoming the first of the big four to slash interest payments to savers. Westpac announced on Tuesday they were moving on their savings rates in line with changes to their variable mortgages. A handful of non major banks have also announced chances to their savings rate including challenger bank Macquarie. The big four bank's quarter of a per cent follows the Reserve Bank of Australia moving on the cash rate, reducing it from 4.10 to 3.85 per cent in a widely predicted move. This was the second rate cut in the cycle, following a 25 basis point reduction in the official cash rate in February and a hold in May. Markets are currently predicting at least three more rate cuts between now and February 2026, with NAB previously forecasting there could be as many as five interest rate cuts by early 2026. National Australia Bank boss Andrew Irvine previously said a combination of a stable government and falling interest rates will help guide the Australian economy with the cash rate to drop to 2.6 per cent by early 2026. 'There's no doubt these are challenging times, there's all sorts of geopolitical uncertainties that we have to manage,' he said. 'That being said, Australia is in good shape. We enter this period of instability in a strong position. 'We have unemployment that's very low, I believe we will see three or four base-rate reductions that will stimulate the domestic economy.' While this is welcomed news for struggling mortgage holders, it comes at the cost of savers, who will be rewarded less as the major banks look to match their borrowing and funding costs. Ms Tindall said the 'glory days' of rates starting with a five is dwindling. 'Macquarie Bank's new ongoing rate of 4.50 per cent, with no monthly terms and conditions to trip customers up, is likely to be one of the highest rates in this particular category once all the banks have declared their post-May RBA rates,' she said. 'If your savings rate has already changed, it could be worth holding steady for the next couple of weeks until the rest of the market has made their changes before you weigh up your options so that you're comparing apples with apples.' On the other hand a number of mortgage holders will soon benefit from lower interest rates. Within 24 hours of the RBA announcing a rate cut, 30 lenders said they were passing on the full rate cut. This included all four major banks that within 30 minutes of the announcement informed customers that the rate cut would be passed on. The big four will pass on cuts to variable loans from between May 30 and June 3 depending on the provider.
Yahoo
23-05-2025
- Business
- Yahoo
Big four bank delivers major savings blow
Australian savers have been dealt a huge blow, with a second major bank confirming they are slashing interest rates. NAB has become the second major bank to move on savings rates, after announcing both its Reward Saver and iSaver accounts have fallen by 25 basis points, with savers now getting 4.4 and 4.65 per cent respectively. Canstar data insights director Sally Tindall said NAB's move was just the tip of the iceberg for Australians with a savings account. 'This is just the start of what will be an onslaught of rate cuts for savers,' she said. 'It's disappointing to see some banks chop savings rates ahead of their mortgage rates. 'One day, it would be fantastic to see a bank reverse this order to benefit its mortgage and savings customers, rather than themselves.' NAB is not alone in moving on savings rates with Westpac becoming the first of the big four to slash interest payments to savers. Westpac announced on Tuesday they were moving on their savings rates in line with changes to their variable mortgages. A handful of non major banks have also announced chances to their savings rate including challenger bank Macquarie. The big four bank's quarter of a per cent follows the Reserve Bank of Australia moving on the cash rate, reducing it from 4.10 to 3.85 per cent in a widely predicted move. This was the second rate cut in the cycle, following a 25 basis point reduction in the official cash rate in February and a hold in May. Markets are currently predicting at least three more rate cuts between now and February 2026, with NAB previously forecasting there could be as many as five interest rate cuts by early 2026. National Australia Bank boss Andrew Irvine previously said a combination of a stable government and falling interest rates will help guide the Australian economy with the cash rate to drop to 2.6 per cent by early 2026. 'There's no doubt these are challenging times, there's all sorts of geopolitical uncertainties that we have to manage,' he said. 'That being said, Australia is in good shape. We enter this period of instability in a strong position. 'We have unemployment that's very low, I believe we will see three or four base-rate reductions that will stimulate the domestic economy.' While this is welcomed news for struggling mortgage holders, it comes at the cost of savers, who will be rewarded less as the major banks look to match their borrowing and funding costs. Ms Tindall said the 'glory days' of rates starting with a five is dwindling. 'Macquarie Bank's new ongoing rate of 4.50 per cent, with no monthly terms and conditions to trip customers up, is likely to be one of the highest rates in this particular category once all the banks have declared their post-May RBA rates,' she said. 'If your savings rate has already changed, it could be worth holding steady for the next couple of weeks until the rest of the market has made their changes before you weigh up your options so that you're comparing apples with apples.' On the other hand a number of mortgage holders will soon benefit from lower interest rates. Within 24 hours of the RBA announcing a rate cut, 30 lenders said they were passing on the full rate cut. This included all four major banks that within 30 minutes of the announcement informed customers that the rate cut would be passed on. The big four will pass on cuts to variable loans from between May 30 and June 3 depending on the provider. Error while retrieving data Sign in to access your portfolio Error while retrieving data
AU Financial Review
16-05-2025
- Business
- AU Financial Review
Labor's $3m super tax may be start of a wealth grab. Just ask ChatGPT
For the past few days, some of Australia's top chief executives – including Commonwealth Bank's Matt Comyn, NAB's Andrew Irvine and Telstra's Vicki Brady – have been bunkered down in the US city of Seattle, for one of Microsoft's most exclusive and influential events. The tech giant's annual CEO summit has an exclusive guest list that includes many leaders from America's Fortune 500 companies. Comyn, who has spent the last two weeks touring the US, and nerds out on the detail of technology like few other Australian CEOs, says the Microsoft conference has become bigger each year, as the artificial intelligence revolution gathers pace.
ABC News
11-05-2025
- Business
- ABC News
US interest rates on hold despite Trump demands to cut
There's more evidence that Donald Trump's campaign of tariffs is clouding the economic outlook in the United States. The US Federal Reserve has once again defied Mr Trump by not cutting interest rates worried the tariffs war could stoke inflation and hurt the US labour market at the same time. Also National Australia Bank CEO Andrew Irvine warns expected rate cuts in Australia risk stoking house prices. Analysis by the ABC's Peter Ryan.
The Guardian
09-05-2025
- Business
- The Guardian
Labor wants to fix Australia's housing issues – but there's little hope for those not already on the ladder
Days after Labor won a decisive victory with a mandate to fix housing affordability, those in charge of handing out mortgages poured cold water on it coming to pass. Andrew Irvine, the chief executive of National Australia Bank, said the country 'may not get the outcome we want' as the gulf between homeowners and everybody else threatens to expand in the coming months. The long-serving ANZ chief executive, Shayne Elliott, was even more forthright when addressing media on Thursday. 'I don't know we are dealing with it. I mean, things are getting worse,' said Elliott, who stepped down from his role on Friday after almost a decade leading the bank. Sign up for Guardian Australia's breaking news email 'I know there's really well-meaning, really thoughtful policies on both sides of politics … but the reality is, as we sit here today, I'm not sure there's confidence that we are going to see any material change any time soon.' The bank bosses pointed to a lack of housing supply for their dour outlook. There are also other factors, such as the need to improve transport networks and infrastructure to ignite that supply, resolve unnecessary planning impediments, tackle high building costs and labour constraints. The affordability problem has built up over decades, and Australia's banking CEOs don't believe the issue will be resolved any time soon. 'The Australian dream is owning a home, and you want younger people to have a chance to do that, you want new Australians to have a chance to do that,' said Irvine. 'The only way we're going to address this is to fix supply. It's still the case that too much of the discourse on housing is on the demand side.' The lack of reformist housing policies – economists criticised both sides of politics for their competing election platforms – is fuelling an expectation that home prices will just keep rising, putting home ownership even further out of reach for younger generations. Many housing reform advocates gave up on expecting federal governments to help resolve the issue after Labor's ill-fated 2019 campaign to overhaul negative gearing and capital gains tax, both of which would have represented robust reforms. Advocates are now focusing their attention on rental rights, which are a state issue. The thinking is that improving tenancy rights may lower the value of rental properties, easing affordability at the expense of landlords. Those already on the property ladder don't want to get off it. Even the banks were surprised how many of those who scrambled to get a mortgage in recent years – and then faced a string of interest rate increases and sharp rise in living costs – kept up with repayments. 'The resilience of customers who have navigated significant cost-of-living challenges over the past few years is impressive,' Westpac chief executive Anthony Miller said on Monday, after delivering the bank's half-year results. Part of the reason people clung on to their mortgages so tightly is that there are no good alternatives, given the tight rental market. Mortgage arrears at the major banks have tended to plateau, or even drop, over the past six months, hovering well below pre-pandemic levels. The number of households requesting hardship packages from their lenders has generally been falling. For those able to hang on to their mortgages, relief is in sight. After the Reserve Bank reduced borrowing rates in February, a quarter-of-a-percentage point cut in the cash rate on 20 May is deemed a sure thing, and would lower the key rate to 3.85%, from 4.1%. From there, financial markets are pricing in a further three cuts to 3.1% by December. Experts are a little less bullish, with a general consensus that the cash rate will end 2025 at 3.35%. Either way, mortgage holders are set to receive substantial relief on their interest payments. The monthly repayment on a $500,000 loan at an interest rate of 6.01% is $3,225. Every cut of 0.25 percentage points lowers the interest bill by $76 a month. A further four rate cuts this year would deliver a $304 boost to monthly household budgets. While existing homeowners will be cheering falling rates, the picture is more complicated for those hoping to break into the property market, or upgrade towards a family home. Lower interest rates boosts borrowing capacity – meaning buyers can afford to pay more. But cheaper money will also lift prices and potentially widen the deposit gap, and worsen the affordability crisis. AMP chief economist Shane Oliver said he expected a rate cut on 20 May followed by another in August. He then expects a cut in November and then again early next year. Oliver said the combination of cheaper loans and Labor's election housing policy to help first home buyers buy with a smaller deposit would ultimately push property prices higher. 'Lower rates and 5% deposits may feel like a good thing, and if you get in early it will be, because they can borrow more and it will be easier to service your loan,' he said. 'For those who get in later (after prices have started climbing faster), it's not so good – and the ultimate winners are existing homeowners.' Louis Christopher, the founder of SQM Research, said rate cuts – if they happen – will have a progressively greater impact on house prices as the year passes. Still, with the election and April holidays out of the way, Christopher expects a busy winter of property auctions. 'We expect housing prices across the country to climb by 6-10% in 2025,' he said.
