Westpac hacks home loan rates by up to 130 basis points

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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

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL 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%
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
ZERO APPLICATION FEESFEE FREE OFFSET
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
  • The shorter your loan, the less interest you pay in the long run.
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
  • The shorter your loan, the less interest you pay in the long run.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO UPFRONT OR ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO UPFRONT OR ONGOING FEES

Owner Occupier Accelerates - Evaporate (LVR 60%-70%) (Principal and Interest)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO UPFRONT OR ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO UPFRONT OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 80%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
UNLIMITED EXTRA REPAYMENTS
UNLIMITED EXTRA REPAYMENTS

Basic Home Loan (Principal and Interest) (LVR < 60%)

    Variable
    More details
    EASY DIGITAL APPLICATION
    EASY DIGITAL APPLICATION

    Neat Variable Home Loan (Principal and Interest) (LVR 70%-80%)

      Variable
      More details
      $0 APPLICATION FEE
      $0 APPLICATION FEE

      Budget Home Loan (Principal and Interest) (LVR < 80%)

        Variable
        More details
        100% FULL OFFSET ACCOUNT
        100% FULL OFFSET ACCOUNT

        Offset Package Home Loan (Principal and Interest) (LVR < 60%)

          Variable
          More details
          LIMITED TIME OFFER
          • Fast turnaround times, can meet 30-day settlement
          • No ongoing or monthly fees, add offset for 0.10%
          • Extra repayments + redraw services
          LIMITED TIME OFFER

          Smart Booster Home Loan Discounted Variable - 1yr

          • Fast turnaround times, can meet 30-day settlement
          • No ongoing or monthly fees, add offset for 0.10%
          • Extra repayments + redraw services

          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 be 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. *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. Rates correct as of July 3, 2022. 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. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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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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