These changes make Westpac the cheapest option among Australia’s Big Four banks in terms of variable rates
Westpac has become the first of Australia’s Big Four banks to put its basic variable loan below 2% by reducing their rate by 20pts, while raising their long-term fixed rates.
The offer is only available on an introductory basic, but will apply to both owner-occupiers. It will offer 1.99% for the first two years, rising to 2.49% thereafter. Previously, the rate was 2.19% then 2.69%.
With the new rates for outside customers with a loan-to-value (LTV) ratio of 70%, it is a clear play for the growing refinancing market from Westpac.
The new rate will only be available through Westpac, though the subsidiaries of Westpac Group – St George Bank, Bank of Melbourne and BankSA – have also cut their variable rates from 2.44% to 2.24%.
These changes now make Westpac the cheapest option among the Big Four in terms of variable rates. Their 1.99% introductory, 2.49% after two-year offer puts them below CBA and NAB (both 2.69%) and ANZ (2.72%) in the variable interest rate category.
However, Westpac has gone in the opposite direction in terms of fixed rates. They have hiked their four- and five-year rates across their own brand and their subsidiaries.
Four-year interest rates have risen 30pts, from 2.19% to 2.49%, with five-year rates going up from 2.49% to 2.79%.
This is in line with the wider trend in the industry, and tied to the generalised rise in the price of money that kicked in with the new term funding period that began at the start of July.
Westpac remain the only Big Four bank with a one-year fixed rate lower than 2%, and the cheapest two-year rate, at 1.89%. ANZ is offering 1.94%, while CBA and NAB are offering 1.99%.