Westpac slashes variable intro home loan rates but increases others

On Tuesday Westpac decreased some 'Flexi First' home loan rates by up to 20 basis points, and increased fixed rates by up to 30 basis points.

The rate changes apply for both owner occupiers and investors, with one cut below the 2% threshold. Details of the cuts are:

• Flexi First Option 2 Year Intro P&I 70%: Now 1.99% p.a. (2.42% p.a. comparison rate*)
• Flexi First Option 2 Year Intro P&I 95%: Now 2.09% p.a. (2.52% p.a. comparison rate*)
• Inv Flexi First Option 2 Year Intro P&I 70%: Now 2.29% p.a. (2.80% p.a. comparison rate*)
• Inv Flexi First Option 2 Year Intro P&I 95%: Now 2.39% p.a. (2.90% p.a. comparison rate*)

These rates are 'Special Offers' meaning the offer could be withdrawn at any time.

The 'intro' rate is offered as a discount for the first two years of the loan, after which the advertised rates increase automatically by 50 basis points (0.50%).

These rates apply for new lending and external refinancing, excluding internal refinances from Westpac and the wider group, which includes Bank of Melbourne, St George, and BankSA.

On the fixed side of the spectrum, Westpac increased interest rates on a large portion of its loans fixed for four to five years by up to 30 basis points. Some noteworthy changes include:

• Fixed Options P&I 4 Years 95%: Now 2.79 p.a. (4.12% p.a. comparison rate*)
• Fixed Options P&I 5 Years 95%: Now 3.09% p.a. (4.12% p.a. comparison rate*)
• Inv Fixed P&I 4 Years 80%: Now 3.29% p.a. (4.64% p.a. comparison rate*)
• Inv Fixed P&I 5 Years 80%: Now 3.29% p.a. (4.51% p.a. comparison rate*)

This represents at least the third time this year that Westpac has increased fixed home loan rates, after it did so in April and June. 

Reasons for this include the winding up of the Term Funding Facility - of which Westpac had access to around $30 billion -  the Reserve Bank reducing bond purchases by $1 billion per week, and rumblings that the Reserve Bank could also lift the cash rate before its forecast 2024 date.

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