Westpac hacks home loan rates by up to 130 basis points

author-avatar By on September 09, 2019
Westpac hacks home loan rates by up to 130 basis points

Photo by alireza naseri on Unsplash

Westpac has today lowered various fixed & variable home loan interest rates by as much as 130 basis points.

A number of interest rates across Westpac’s range of ‘Premier Advantage’ package loans and ‘Flexi’ loans have been cut, which includes loans for investors and owner-occupiers on principal and interest (P&I) or interest-only (IO) repayments.

The new fixed rates are available to new customers or existing Westpac customers who switch to a fixed-rate loan, while the variable-rate cuts apply to new customers only.

Westpac’s General Manager for Home Ownership Will Ranken told Savings.com.au fixed loans remain a popular option for customers looking for certainty around their home loan repayments.

“Today’s changes provide a competitive offering for both property investors and owner-occupiers,” Mr Ranken said.

“The current low interest rate environment is driving competitive offers for home buyers, which coupled with the new home loan incentives and discounts available may make it an appealing time for Australians to start thinking about purchasing a home.”


Westpac investor rate cuts

Most of Westpac’s biggest changes applied to fixed IO loans for investors.

The biggest rate cut was saved for its four-year fixed IO ‘Premier Advantage’ package loan for investors, which had its rate reduced by 130 basis points to 3.79% p.a. (4.64% p.a. comparison rate*).

Fixed-rate investment borrowers can alternatively take out the two-year fixed IO ‘Premier Advantage’ package loan with Westpac at 3.59% p.a. (4.72% p.a. comparison rate) after its rate was cut by 30 basis points.

Westpac also cut one variable IO package loan for investors by 44 basis points to 3.99% p.a. (4.00% p.a. comparison rate*).

P&I fixed-rates for investors under the ‘Premier Advantage’ package were also cut by up to 110 basis points, while the P&I ‘Flexi First Option’ variable rate was cut by 34 basis points.

Westpac owner-occupier rate cuts

Westpac also cut rates on a number of owner-occupier products.

IO loans were again the biggest movers, with the Premier Advantage fixed rates at the forefront.

The five-year IO loan for owner occupiers saw a rate decrease of 110 basis points to 3.99% p.a. (4.55% p.a. comparison rate*).

The one-year Premier Advantage IO rate was cut by 70 basis points to 3.89% p.a. (4.63% p.a. comparison rate*), while the four-year rate was cut by 100 basis points to 3.99% p.a. (4.57% p.a. comparison rate).

There were similar changes made to the Premier Advantage products with P&I repayments.

The five-year P&I loan saw a rate decrease of 60 basis points to 3.49% p.a. (4.02% p.a. comparison rate*).

The one-year Premier Advantage P&I rate was cut by 80 basis points to 3.29% p.a. (4.05% p.a. comparison rate*), while the four-year rate was cut by 60 basis points to 3.49% p.a. (4.02% p.a. comparison rate*).

The Flexi First Option home loan is the only variable owner-occupier loan to be cut, its rate for borrowers with over 70% LVR falling by 15 basis points to 3.43% p.a. (3.44% p.a. comparison rate*).

In total, 27 of Westpac’s home loans have been cut. Many of the products affected are packaged products, which have higher comparison rates due to the extra packaging fees generally associated with these sorts of loans.

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 27, 2021. View disclaimer.


The lack of an RBA rate cut in September means there hasn’t been a flurry of lenders dropping home loan rates in response, at least not compared to previous months.

Late last month Westpac’s subsidiaries – St. George, Bank of Melbourne and BankSA – announced fixed rate cuts of up to 135 basis points for new home loan applicants.

Of the lenders who have slashed rates so far this month, non-bank lender Well Home Loans has cut rates to its lowest rate yet of 2.74% p.a. (2.96% p.a. comparison rate*) for its two-year fixed-rate loan.

ME meanwhile has trimmed various interest rates to 3.29% p.a. (3.73% p.a. comparison rate*), while Heritage Bank cut fixed rates for owner-occupiers by up to 30 basis points.

After passing on some or all of the RBA’s rate cuts in June and July, there’s a huge range of home loans with interest rates below 3.50% p.a now, with some even offering rates below 3.00% p.a, such as Well Home Loans.


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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