Jeremy Cabral, publisher of HomeLoanFinder.com.au appears on the Weekend Today Show to discuss interest rates, the Reserve Bank and how much the banks make if they don’t pass on a full rate cut. He discusses comparing loans, refinancing, first home buyers and credit cards.
Steve: The big four banks have announced they’re passing on the RBA
cut, but not all of it, and they’re also delaying the cut.
Personal finance publisher at HomeFinder.com.au, Jeremy Cabral
joins us now to break it down. Jeremy, very good morning to you.
The banks are making a lot of money by delaying on this cut.
Just how much?
Jeremy: Look, mate. Every single day that they don’t pass on that cut
and they don’t make that commitment to pass it on the everyday
Australian, they’re making over million.
Steve: We’ve got a little bit of a clock here to show you exactly how
this ticks over; very, very quickly. Works at roundabout -odd
a second. You can understand why they are delaying this cut. Is
it fair to people?
Jeremy: I think it’s not fair. Every single time we have these cash
rate announcements, the banks are sort of using it to their
advantage and taking a little bit longer than they should in
actually passing that rate on to the everyday Australian. The
key message we have here is Australians need to be making sure
they take the situation into their own hands. Don’t wait for the
RBA or your banks to respond. You can actually do a comparison.
It’s very easy on a website like Homeloanfinder.com.au. Take the
situation into your own hands.
Steve: Even though the full rate cut is not being passed on, people
can still save. How much?
Jeremy: Absolutely. There’s some home loans out there that we’re going
to look at shortly. Some of them are 5.24% comparison rates.
It’s just a situation where, obviously, with first-time buyers
if you do a comparison and do that research, you’ll be able to
get a really great deal. Also for existing home owners, you can
do a refinancing package with the bank and get a really good
Steve: All right. Take us through the numbers here for people at home;
how much they can save.
Jeremy: Essentially, by passing on the 0.02% figure, which is what most
of the banks have been doing, that’s essentially going to save
most Australians almost a month.
Steve: There are some good deals out there at the moment. What’s your
advice for people?
Jeremy: I think when it comes to the deals, the advice is to stop and
just make sure you research before you commit to anything. It’s
very easy to do that with a comparison website. As I was saying,
in 5 loans to look at; you’ve got the Loans.com.au Blackboard
Special. That’s great if you are looking for a low variable rate
home loan, that’s one that’s worth considering. Also for
refinance, there’s the You Bank You Home Loan.
There’s opportunities for every single Australian to be able to
save that money. It just takes a few moments to visit a website;
HomeLoanFinder.com.au. Or just even speak to a friend that has
already sold. It’s just something you need to stop and pause,
and really solve that for yourself.
Steve: We often talk about how much money that we can save on
mortgages. What about credit card holders, does that affect
Jeremy: I’m glad you mentioned that, because often, what happens is
that we really focus on home loans, and as a result of that, I
don’t think there’s as much competition, or as much pressure to
be able to change credit cards in line with RBA cash rate
changes. Again, the same messages there about comparison, but
it’s also about finding the right product for yourself. If you
have a balance, it doesn’t make sense to have a rewards credit
card. If you know you’re going to be spending and you’re not
going to be able to repay it off in full, make sure you do that
on the right card, get a low interest card. It’s really about
finding the right credit card for yourself, as well.
Steve: This is almost looking like the American debt ticking over
every second-by-second, but this money is all going to the bank.
This is quite staggering, a second. How much money are they
actually going to make over the year?
Jeremy: It does depend; it’s difficult to say exactly what that would
be. Obviously, there’s going to be more announcements each
month. If we stay in here long enough, I’m sure we’re going to
hit the million mark. It’s about watching the markets right
now; there’s a lot of changes happening. Pay attention to your
home loan statements each month; make sure that you’re doing the
right thing. If you can’t afford to make a payment in a month,
make sure you chat to your bank and be upfront. Make sure you
set an arrangement in place that’s not going to get you stuck.
Steve: Good tip. We want that money going into our pocket and not into
the bank’s pocket. Thank you very much for joining us tonight.
Jeremy: Thank you, Steve. Cheers.
Steve: All right. See you around.