Westpac group lifts 4 and 5-year fixed mortgage rates

author-avatar By on April 28, 2021
Westpac group lifts 4 and 5-year fixed mortgage rates

Major bank Westpac has become the latest to increase fixed home loan rates, upping the cost of its four and five year fixed loan terms.

Westpac today increased the interest rates on two of its 'Premier Advantage Fixed Options' home loan by 30 basis points, taking the new interest rates on these loans to:

  • 2.29% p.a for the 4-yrs loan (3.38% p.a comparison rate*)
  • 2.59% p.a for the 5-yrs loan (3.43% p.a. comparison rate*)

This applies to principal and interest repayments (P&I) only at this stage, and is available for customers borrowing at least $150,000 at a maximum LVR of 95% (a 5% deposit). 

These changes come after Westpac cut to its 'lowest ever' fixed home loan rates just last month for two-year fixed loans, at an advertised rate of 1.79% p.a (3.37% p.a comparison rate*). 

On a $500,000 loan amount, this 30 basis point increase on the five-year loan would result in an extra $4,000 being paid in interest (bearing in mind fixed rate changes only apply to new customers). 

The table below displays a snapshot of some of the lowest fixed home loan rates from a variety of lenders.

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

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


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 19, 2021. View disclaimer.

Westpac's subsidiary banks - St. George, Bank of Melbourne, and Bank SA - also made the same home loan rate changes. 

These banks increased their Advantage Package and Residential Fixed loans by 30 basis points for four and five-year fixed terms. 

The Advantage Package changes are the same as above, whereas the 'Residential Fixed' changes are the following:

  • Residential Fixed P&I 4 yrs: new rate of 2.44% p.a (4.02% p.a. comparison rate*)
  • Residential Fixed P&I 5 yrs: new rate of 2.74% p.a (4.00% p.a. comparison rate*)

Compare: Fixed home loan interest rates 

Fixed rates on the way up again 

Low-rate fixed loans have been all the rage lately, with Commonwealth Bank even reporting a massive 38% growth in fixed lending in just six months last year. 

Commbank also lowered the interest rates on some of its shorter fixed-terms (two-years), as did NAB by 15 basis points

Yet some fixed rates are being increased again, particularly for the longer terms of four and five years. 

Westpac isn't the only lender to increase fixed home loan interest rates lately, big or small: Commonwealth Bank also moved to increase select four-year fixed rate home loans by up to 20 basis points in March.

The likes of Bankwest, Newcastle Permanent, and Greater Bank all raised rates on fixed home loan products recently, while Adelaide Bank hiked some of its variable interest rates by up to 15 basis points.

A major reason why fixed interest rates have been reduced so rapidly in recent months is the Reserve Bank's 'Term Funding Facility' (TFF), a pool of around $200 billion for lenders to use at ultra-low interest rates over three years. 

As this facility expires in June of 2021, experts have warned that fixed interest rates beyond three-year terms will start to be increased again. 

These low-rate fixed loans can also catch borrowers unaware with their high revert rates at the end of the fixed term, something Firstmac Chief Financial Officer James Austin said posed a serious risk to borrowers in a few years. 

"Rates will reset to the banks' SVR (standard variable rate), currently around 4%-4.5%. By the end of three years the cash rate is anticipated to have risen to around 0.50%, taking these SVR to 4.5% ~5.05%," Mr Austin told Savings.com.au.

"That is a huge jump from the current 1.99% fixed rates on offer. This may well challenge the serviceability of many borrowers.

Related: Why are home loans rates climbing when the cash rate is still 0.10%?

Image source: Wikipedia Commons 


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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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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