Westpac Group drop fixed home loan rates below 3%

author-avatar By on August 22,2019
Westpac Group drop fixed home loan rates below 3%

Image by David Gray via Adobe Stock

Australians are now being offered what are some of the lowest fixed mortgage interest rates in history, with Westpac subsidiaries dropping rates below 3%.

Westpac-owned St. George, Bank of Melbourne and BankSA have announced cuts to their fixed rate offerings of up to 135 basis points effective for new home loan applications received from 21 August.

Customers with bigger deposits are being rewarded with the lowest rates, with some rates as low as 2.94% p.a. for terms of up to five years, though the comparison rates do differ.

The biggest cuts were by St. George and Bank of Melbourne who cut their four and five-year fixed-rate loans for new owner-occupiers paying principal and interest by 135 basis points.

Looking for a low variable rate home loan? The table below displays owner-occupier products which may represent the best of the big four banks, best of the top 10 customer-owned banks and the best of the larger non-banks. 

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
2.84% 2.80% $1,652 More details
2.95% 2.99% $1,676 More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 75%. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 17 February 2020. View disclaimer.

Despite recent sharp cuts to fixed rates, demand for fixed-rate home loans has continued to fall.

According to the latest data from Mortgage Choice, demand for fixed-rate mortgages fell to 14% in July.

Mortgage Choice CEO Susan Mitchell said even though there are good deals, she isn’t surprised amid expectations of further rate cuts to the cash rate from the Reserve Bank of Australia (RBA).

“Despite some very attractive fixed-rate home loan pricing, borrowers across the country are reluctant to fix,” Ms Mitchell said.

“It’s not entirely surprising that borrowers are choosing to keep their options open by opting for variable rate home loans. The reality is, the opportunity to save on repayments if the Reserve Bank cuts the cash rate is too good to pass up.

“In the minutes of the RBA Board’s August meeting released yesterday, members judged it reasonable to expect that an extended period of low-interest rates would be required and suggested that further easing of monetary policy may be on the cards.”

St. George fixed rate cuts

St. George has made a number of big cuts of up to 135 basis points for owner-occupiers.

  • Four-year fixed principal and interest 60% LVR has been cut by 135 basis points to 2.94% p.a. (comparison rate 3.76% p.a.)
  • Five-year fixed principal and interest 60% LVR has been cut by 135 basis points to 2.94% p.a. (comparison rate 3.72% p.a.)
  • One-year fixed principal and interest 60% LVR has been cut by 105 basis points to 2.94% p.a. (comparison rate 3.90% p.a.)
  • Two-year fixed principal and interest 60% LVR has been cut by 15 basis points to 2.94% p.a. (comparison rate 3.85% p.a.)
  • Three-year fixed principal and interest 60% LVR has been cut by 25 basis points to 2.94% p.a. (comparison rate 3.81% p.a.)
  • Four-year fixed principal and interest 60-80% LVR has been cut by 135 basis points to 2.99% p.a. (comparison rate 3.81% p.a.)
  • Five-year fixed principal and interest 60-80% LVR has been cut by 135 basis points to 2.99% p.a. (comparison rate 3.77% p.a.)

Bank of Melbourne fixed rate cuts

Bank of Melbourne is rewarding borrowers with bigger deposits, slashing rates by up to 135 basis points.

  • Four-year fixed principal and interest 60% LVR has been cut by 135 basis points to 2.94% p.a. (comparison rate 3.76% p.a.)
  • Five-year fixed principal and interest 60% LVR has been cut by 135 basis points to 2.94% p.a. (comparison rate 3.72% p.a.)

If fixing for that long isn’t your thing, Bank of Melbourne also offer that interest rate across their one, two and three-year fixed terms, though the comparison rates do differ slightly.

BankSA fixed rate cuts

  • Three-year fixed principal and interest $150k have been cut by 25 basis points to 2.99% p.a. (comparison rate 3.89% p.a.)
  • Two-year fixed principal and interest $150k have been cut by 15 basis points to 2.99% p.a. (comparison rate 3.94% p.a.)
  • Three-year fixed principal and interest has been cut by 25 basis points to 3.14% p.a. (comparison rate 4.64% p.a.)
  • Four-year fixed principal and interest has been cut by 15 basis points to 3.14% p.a. (comparison rate 4.50% p.a.)

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Emma joined Savings.com.au as a Finance Journalist in 2019. She is a journalist with more than five years experience across print, broadcast and digital media, with previous stints at Style Magazines, 4ZZZ radio, and as editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of young women and millennials by writing about complex financial topics in a way that's easy for the average Joe (or Jill) to understand. When she's not writing about finance she's watching Greys Anatomy (again).

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