Westpac backs November RBA bolter by cutting mortgage rates
Westpac has discreetly dropped its Flexi First Option online home loan rate to 5.24% p.a. (5.25% p.a. comparison rate*) for owner occupiers with up to 70% loan-to-value ratio (LVR) and making principal and interest (P&I) repayments.
It's 10 basis points off the old rate while the investor rate has been dropped 20 basis points to 5.39% p.a. (5.40% p.a. comparison rate*) for those making P&I repayments only.
The new rate undercuts CommBank's online Digi home loan rate of 5.34% p.a. (5.47% p.a. comparison rate*) for new borrowers with up to 60% LVR.
Macquarie also offers a basic variable rate of 5.34% p.a. (5.36% p.a. comparison rate*) to owner occupier borrowers with up to 70% LVR.
The Westpac rates are available to new borrowers and external refinancers applying online only, with the owner occupier rate increasing to 5.34% p.a. (5.35% comparison rate*) for those with up to 80% LVR.
See also: Lowest Variable Home Loan Rates
It's worth noting many of the major banks' best variable home loan rates are reserved for borrowers with 60-70% LVR.
Some smaller lenders are currently offering variable rates as low as 4.99% p.a. but these are limited to special first home owner deals.
See also: Which home loans offer interest rates below 5%?
There are also many lenders with fixed rates below 5%, including Westpac which was the first of the big banks to offer a fixed rate under 5%, again for borrowers with up to 70% LVR and fixing for two years.
Big banks battle for home loan share
The Westpac move is the latest broadside in the battle for home lending market share, timed nicely for the Spring selling season and the launch of the federal government's expanded 5% Deposit Scheme.
Recent data shows Westpac lost the most ground of the major banks over the past 12 months, with its market share dropping 0.58 points to 20.7%.
It remains behind Commonwealth Bank with a steady share of 25.3%.
The data confirmed Australia's 'fifth big bank' Macquarie continues to take market share from the big four and regional lenders, now accounting for 6.37% of the mortgage market.
Macquarie's home lending book was up 22% in the past 12 months and grew 3.8 times the average of all banks in August.
Market analysts link Macquarie's growth to its technology which sees it being able to provide quick turnarounds on loan approvals, highly favoured by mortgage brokers.
It's gradually closing in on ANZ which is reportedly reassessing its decision to pull out as a participating lender in the 5% Deposit Scheme.
The scheme allows eligible first home buyers to take out a home loan with deposits as low as 5% without the need to take out lender's mortgage insurance (LMI).
It's speculated ANZ may have opted out of the government scheme as it has its own in-house LMI product, unlike its big four peers.
It's also ended its longstanding $2,000 refinancing cashback offer, with $3,000 still on offer for first home buyers.
See also: Current home loan cashback offers and deals - October 2025
RBA holds, Westpac drops
The Westpac cut also comes in the wake of the Reserve Bank of Australia's decision to keep the cash rate on hold at 3.60% after its last monetary policy meeting on 29-30 September.
Westpac is notably the only big bank still backing a November rate cut, after its big four counterparts scrapped their forecasts amid reignited concerns over inflation.
See also:
NAB calls no more cash rate cuts after inflation shock
CBA cans November rate cut call
ANZ the last to ditch November rate cut prediction
NAB was first to pull the plug on a November cut after higher-than-expected monthly inflation data for August.
CBA and ANZ held fire until after the September meeting but followed suit after noting the RBA appeared back on its hawkish path in stamping out any resurgence in inflation.
But Westpac has put its money where its mouth is in dropping its best home loan rate well before the RBA next meets on 3-4 November.
Will there be a November cash rate cut?
Its decision to stand firm on a November rate cut may prove decisive, given mixed signals on the economy according to recent data.
Job vacancies were down a significant 2.7% between the May and August quarters, reversing gains of the previous quarter.
The decline was driven by the private sector and shows a softening in the jobs market.
But it's likely the RBA's next decision on the cash rate will hinge on key quarterly inflation data due to be released on 29 October, a week before the monetary policy decision.
At this stage, markets are pricing in less than 50% chance of a November rate cut.
Two of the big banks don't see another cash rate cut until February with NAB saying there won't be another until May 2026.
In the interim, any movement in home loan interest rates will likely be competition driven with lenders jockeying to bolster their market share.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
