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. 

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 28, 2021. 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 2020. They are (in descending order): Great Southern Bank, 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 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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, Performance Drive 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.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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