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Westpac Reduces Fixed Home Loan Rates to Some of the Lows Ever in the Loan Market

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Westpac upped the ante in the ongoing mortgage rate war, setting one of the lowest rates in the nation’s lending market.

The big bank cut interest on its two- and three-year fixed-rate mortgages by up to 20 basis points in what has been described as an “ultra-competitive” move by the nation’s second-largest financial institution.

Its two-year fixed owner-occupant loan now benefits from a rate of 1.79%, the lowest in the product category.

Westpac’s three-year fixed rate now stands at 1.88%, while its four-year fixed rate is 1.89%.

Mortgage rate cuts have been implemented in the Westpac banking group, which includes St George, Bank of Melbourne and BankSA.

RateCity researcher Sally Tindall said Westpac has followed similar moves from rivals ANZ and NAB, with Commonwealth Bank being the last of the Big Four to budge.

“As we approach the bottom of the rate cycle, provided the cash rate stays above zero, it is likely that there will be more cuts in the coming weeks as banks compete for record highs of new loans coming in, ”Tindall said.

“ABC’s fixed rates are starting to look outdated – with a single fixed rate below 2%. “

Australia’s home loan market continues to be inundated with cheaper rates due to the Reserve Bank of Australia’s interest rate cut triggered by the coronavirus pandemic.

The RBA, through its monetary policy parameters, lowers the cash rate in an attempt to stimulate economic activity through cheaper loans to banks, which then pass on cheaper loans to households and businesses.

Australia’s official liquidity stands at 0.1 percent.

Ms Tindall said lower fixed rates would only further boost buyer confidence; however, customers should be aware of additional terms and conditions that may apply when purchasing a locked-in contract.

“If you are considering fixing your rate, understand the additional terms that come with the fixing and think carefully about what your plans might be over the term of the fixed rate,” she said.

“You might split your loan or take out a shorter fixed rate to give yourself more options.”

To get Westpac’s low rates, customers will need to have a loan-to-value ratio (LVR) of less than 70%.

A 70 percent LVR translates into holding a 30 percent deposit.

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