AMP's new 40-year mortgage raises a big question

The rise of 40-year home loans in Australia, plus, why scam victims are ignoring their instincts and what the RBA says we're getting wrong about inflation. Here are five money stories you might have missed this week.

AMP launches 40-year loan

AMP Bank has unveiled a 40-year investment loan, joining a growing number of lenders extending mortgage terms beyond 30 years.

It wasn't so long ago that 25-year mortgage terms were the norm.

Recent years have seen this pushed out to three decades.

This week saw AMP Bank stretch loan terms out even further - for property investors at least - with its new Equity Flex Loan.

Equity Flex offers a whopping 10 years of interest-only payments with a loan term of up to 40 years.

With an interest-only rate of 6.54%, this loan is pitched at investors.

So how long is too long for a home loan?

Other lenders with 40-year mortgages include Bluestone Home Loans, Liberty Financial and Unity Bank, though not all these loans are pitched at investors.

While a longer term will lower regular repayments, it can also significantly raise the loan's overall interest cost.

The thing is, few landlords hold onto a rental property for 40 years.

Research by the Australian Housing and Urban Research Institute found half of all residential property investments last for just two years. The average investment period is closer to four years.

Most Australians don't understand how interest rates fight inflation: RBA

An RBA survey found only 25% of Australians correctly understand how higher interest rates are intended to bring inflation down.

It's a fair bet homeowners grappling with three rate hikes since February are focusing on how they'll meet higher loan repayments rather than worrying about the economic rationale behind the rate decisions.

But the Reserve Bank of Australia (RBA) says part of the problem is that most of us just don't get the connection between higher rates and the RBA's efforts to tame rising prices.

A recent RBA survey identified what it describes as "a large gap" in the understanding among Australians of how interest rates affect inflation.

Apparently, only one in four (25%) of us "assessed correctly" that higher interest rates would ultimately lead to lower inflation.

More than half believed that higher interest rates would lead to higher inflation (which you have to say is not an unreasonable assumption given that higher rates raise home loan repayments).

Fortunately, the RBA recognises the need for further community education.

Our central bank says it is adapting its "communication approach to better meet the needs of different audiences".

Nearly one in three scam victims suspected a scam but lost money anyway

CommBank research shows nearly one in three scam victims had doubts.

Never underestimate scammers. They are masters of psychology.

A new CommBank study shows nearly one-third of scam victims suspected something was wrong - but went ahead anyway.

It goes to show that scams are designed to override our instincts in moments of pressure.

CommBank's executive general manager for scams and fraud, James Roberts, says the findings challenge the stereotype that scam victims are simply careless or uninformed.

"Scams don't just work because people miss the warning signs - often people sense something is off, but the scam is designed to push them to act anyway," notes Roberts.

"Scammers are no longer just trying to trick people - they're targeting how we make decisions.

"Many scams are designed to feel routine and legitimate, so people act without stopping to verify. That's exactly what scammers rely on."

According to Roberts, one of the most powerful things we can do is treat that uneasy feeling - our gut instinct - as a signal.

He says, "If something feels off, stop, check and verify the source before you act."

To help Australians spot scams in the moment, CommBank has launched a new investment scams educational video showing how scammers operate and what to watch for.

Australia's biggest HECS debt hotspots revealed

Melbourne and Sydney account for the largest share of Australia's HECS debt.

Tertiary education doesn't come cheap.

Almost 2.4 million Aussies have a HECS debt, with the average balance sitting at $28,500, and around half of all HECS debts held by people aged under 30.

But accounting firm KPMG says the bulk of the nation's $67.6 billion HECS debt is held by Sydneysiders and Melbournites.

KPMG urban economist Terry Rawnsley says, "This is really a story about the geography of opportunity."

He adds, "Rather than signalling financial stress, it shows how higher education can act as an investment in future earnings.

While average HECS balances exceed $30,000 in both Melbourne and Sydney, the Gold Coast has an average HECS debt of $31,000.

Rawnsley explains this, saying, "The Gold Coast stands out with one of the largest average HECS balances outside the major capitals, as the city's economy becomes more diversified and attracts more highly skilled workers."

Graduates may easily be stressed about their outstanding HECS debt.

But Rawnsley believes "HECS empowers graduates to achieve higher wages in the long run, offering significant financial and career benefits over time."

KttiPay customers have one month to move their money

The group payments app will close on August 31, 2026.

Launched in 2023 as a shared digital wallet, Kttipay was designed to make it easier for mates to split the cost of dining out, accommodation and special events like hen's nights.

But after just three years, KttiPay is closing down with what the website says is a shift to a new project called Maytes.

KttiPay can continue to be used until August 24 but users will need to settle or close any open kttis, PayLinks or payment requests and move or cancel direct debits linked to their KttiPay account

App users will still be able to access their account and transfer any remaining money out until KttiPay closes on August 31.

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