Major bank scraps mortgage refinance cashbacks
Is this the beginning of the end for home loan cashbacks? Wait times for private health cover can be shorter than public health queues, and returns on savings outpace home loan rates. Here are five things you may have missed this week.
Major bank scraps cashbacks
Could this be the beginning of the end for cashback deals on home loan refinances?
The Commonwealth Bank has announced that from June it will scrap its $2000 cashback for refinancers, which it says is squeezing interest margins.
That's despite CommBank posting an after-tax profit of $2.6 billion for the third quarter of the financial year.
Home loan borrowers have been switching lenders at unprecedented rates, with over $200 billion worth of home loans refinanced since rate hikes kicked off in May 2022 according to ABS figures.
The sheer volume of loans refinanced is making cashbacks a pricey drawcard for the 30 or so lenders offering them.
While most cashbacks are worth between $2000 and $4000, Reduce Home Loans has a cashback worth $10,000 (you'll need to borrow at least $2 million).
A cashback deal can be tempting, but industry insiders say it can be a sugar hit that distracts borrowers from focusing on the loan rate, which is where the long term savings lie.
Uninsured Australians languish on hospital waitlists
When cost of living pressures bite, one of the first casualties can be private health cover.
But it pays to think twice.
Wait times for elective surgery (deemed medically necessary but not an emergency) can be lengthy through the public system.
A Finder survey shows a staggering 35% of Australians without private health insurance have waited a year or more for surgery, with one in five (18%) on the waitlist for more than 2 years.
Finder's Tim Bennett says, "The consequences of being uninsured need to be weighed up as the stakes are high. For certain ailments, serving the waiting period of private health cover is quicker than staying in the public queue."
He adds, "The added expense of a monthly premium is worth it for some, especially if it means halting further damage to the body for things like knee and hip replacements."
The cost of private health insurance varies, but Finder analysis shows a bronze hospital-only policy will cost $100 a month on average for a 30-year-old Sydneysider earning less than $90,000.
Savers can earn higher rates than home owners pay
Despite the pinch of higher living costs, plenty of people are tucking money away, with Commbank reporting quarterly growth in household deposits of $6.2 billion.
In a quirky sign of the times, it may be possible to earn a higher rate on savings than home owners are paying on a mortgage.
Bank of Queensland has just lifted the return on its Future Saver (for account holders aged 14-35) to 5.30%. ING's Savings Maximiser comes with a rate of 5.25%, and RaboBank is paying 5.15% on its High Interest Savings Account.
While conditions may apply to earn these rates, they can be up to 0.58% higher than the cheapest home loan rates.
LCU's Savvy First Home Buyer Loan for instance, has a 3-year introductory rate of 4.72%.
Other lenders with loans priced below 5% include Summerland Credit Union (4.89%), Fire Service Credit Union (4.89%) and unloan (4.99%).
Westpac app makes it possible to track carbon footprint
Each and every day we all leave behind a carbon footprint.
That's the amount of greenhouse gases released into the atmosphere as a result of our activities including the goods and services we buy.
With more Australians aiming to reduce their carbon footprint, Westpac has begun rolling out a new app function that lets customers track their estimated carbon footprint.
It works by using the value of the transaction and its industry category (such as home energy, car fuel or groceries) to calculate emissions based on industry average data.
Westpac Consumer and Business Banking Chief Executive, Chris de Bruin, says Australians are increasingly concerned about sustainability, but adds, "There are knowledge gaps that prevent people from engaging in more sustainable behaviours."
The Westpac Carbon Footprint Tracker will provide insights into the carbon footprint associated with everyday purchases, such as takeaway food, transport, and groceries.
Prior preparation the key to confidence in retirement
Vanguard's inaugural How Australia Retires study, reveals that feeling confident about retirement is more likely to hinge on prior planning rather than age or income.
The survey found simple steps such as focusing on saving, budgeting, and making personal contributions to super can make a significant difference to how confident we feel about hanging up our work boots.
Vanguard Australia's Managing Director, Daniel Shrimski, says "One of the key findings in this report is that having a plan is one of the most effective ways to not only achieve a successful retirement, but to alleviate the emotional burdens and anxieties that Australians can feel towards retiring.
Shrimski goes further, saying, "For younger Australians who are redefining the traditional path towards retirement with career breaks, parental leave and travel, having a plan is paramount to ensuring these pauses in paid work don't impede their ability to accumulate enough superannuation and save for retirement."
A simple start to planning for retirement is checking your super balance.
According to Vanguard, one in four of us are in the dark about how much we have in super, and half are clueless about fund fees.
Get stories like this in our newsletters.