Westpac cuts variable introductory rate to 1.99% but increases fixed rates

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Westpac has now become the first major bank to offer a variable mortgage rate of less than 2%, but the rate is just a launch.

Australia’s second-largest lender cut base variable rates by 0.20% for both homeowners and investors paying principal and interest.

This brings Westpac’s lowest floating rate to 1.99% for 2 years, falling back to 2.49% thereafter.

Today’s cuts extend beyond the group’s flagship brand – St. George, Bank of Melbourne and BankSA all lowered their base variable rates by 0.20%. The subsidiaries also reduced their 2-year fixed rates by 0.10%.

However, it wasn’t all good news for people looking for a new home loan. The group raised its fixed rates at 4 and 5 years by 0.30%.

Westpac fare changes

Owner occupants paying principal and interest, 70% or less loan-to-value ratio

Rate type Old lowest rate New lowest rate Switch
Basic variable loan (Flexi First) 2.19% for 2 years, then 2.69% 1.99% for 2 years, then 2.49% -0.20%
4 years fixed 2.19% 2.49% + 0.30%
5 years fixed 2.49% 2.79% + 0.30%

Rate changes at St. George, Bank of Melbourne

Owner occupants paying principal and interest, 60% or less loan-to-value ratio

Rate type Old lowest rate New lowest rate Switch
Basic variable loan 2.44% 2.24% -0.20%
2 years fixed 1.89% 1.79% -0.10%
4 years fixed 2.19% 2.49% + 0.30%
5 years fixed 2.49% 2.79% + 0.30%

For a full list of rate changes for homeowners and investors with different deposit sizes, please contact us.

Analysis of the RateCity.com.au database shows that while the majority of the changes for fixed rates were increases, especially longer terms of 3 years and more, it was a completely different story for rates. variables.

In the past two months, 54 lenders have reduced at least one variable rate, while only 10 lenders have increased variable rates.

Lenders who have changed at least one fixed rate in the last 2 months

(June 25 to August 24, 2021)

Lenders who cut Lenders who have increased Current lowest rate
Variable 54 ten

1.77%

1 year fixed 21 20

1.69%

2 years fixed 27 25

1.79%

3 years fixed 19 29

1.85%

4 years fixed 6 25

2.14%

5 years fixed ten 26

2.27%

Source: RateCity.com.au. Note that some lenders have moved more than one rate.

RateCity.com.au Research Director Sally Tindall said: “Westpac is looking for a bigger slice of the refinancing pie, which hit a record over $ 16 billion in June according to latest figures ABS. “

“Westpac is the first major bank to offer a variable mortgage rate starting with a ‘1’. she said.

“The bank was already in fierce competition in most fixed rate categories. Today, he’s chasing variable rate customers who want both low rates and flexibility.

“While fixed rates are, by and large, on the rise, we still see more variable rate cuts than hikes, because for most banks, this is usually the only place that is left with the fat in. to cut.

“Westpac’s variable rate reduction is only for new customers, however, that shouldn’t stop existing customers from picking up the phone and asking for a lower rate,” she said.

The Big Four Banks’ Lowest Rates for Homeowner Home Loans

ABC Westpac * NAB ANZ
1 year fixed

2.09%

1.99%

2.09%

2.04%

2 years fixed

1.99%

1.89%

1.99%

1.94%

3 years fixed

2.19%

1.98%

2.08%

2.04%

4 years fixed

2.29%

2.49%

2.24%

2.49%

5 years fixed

2.99%

2.79%

2.49%

2.69%

Variable

2.69%

1.99% for 2 years then 2.49%

2.69%

2.72%

Source: RateCity.com.au. * Note: Westpac rates are a loan to value ratio of up to 70%.

Lowest rates from RateCity.com.au database

Lender Rate
1 year fixed Big Bank

1.69%

2 years fixed St George / Bank of Melbourne / Grand Bank

1.79%

3 years fixed 86,400

1.85%

4 years fixed Teachers’ mutual

2.14%

5 years fixed Freedom loan

2.27%

Variable Reduce home loans

1.77%

Source: RateCity.com.auNote: Rates are for homeowners paying principal and interest. Certain LVR requirements apply.

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