Westpac undercuts major rivals with fixed rate cut

Larry SchlesingerDecember 8, 2020

Westpac has become the latest mortgage lender to cut its fixed-rate mortgage rates as the battle continues to attract and lock in cautious borrowers in low-priced fixed mortgage deals.

When including the discounts of 0.2 percentage points in Westpac's Premier Advantage Package (PAP) are included in the latest reductions, the new offers will see the following rates apply:

  • Two-year fixed-loan – down 0.15 percentage points to 5.54%
  • Three-year fixed-loan – down 0.1 percentage points to 5.54%
  • Four-year fixed-loan – down 0.1 percentage points to 5.89%
  • Five-year fixed-loan – down 0.1 percentage points to 5.89%
  • The existing discounted one-year offer remains unchanged at 5.69%.

The bank now offers the cheapest three-year fixed home loan rate, compared with 5.59% offered by the Commonwealth Bank and 5.64% on offer from NAB.

It takes the popular three-year fixed-rate loan to its lowest level since April 2009.

It also offers the lowest big four bank two-year fixed of 5.54%, four-year fixed at 5.89% and five-year fixed at 5.89%.

"We have experienced an increasing demand for fixed-rate loans, particularly for extended periods of time as a growing number of our customers look for certainty, security and peace of mind over their mortgage repayments,” says Jason Yetton, group executive of Westpac's retail and business banking division.

"As a result, we are pleased to be able to offer these very attractive rates that put us in a market leading position amongst our major peers in what is a very competitive market."

Westpac’s move to slash fixed-rates follows Citibank repricing its one-, two- and three-year fixed-rate home loans to 5.55% per annum, a reduction of 44 basis points over the past month.

ME Bank is currently offering the lowest three-year fixed rate at 5.39% for its super and union members, according to ratecity.com.au – 23 basis points below the lowest variable home loan rate on the RateCity database (5.62% from UBank)

The push to offer lower fixed rates comes as demand for the products rises with RateCity.com.au reporting that close to one in five home loan enquiries (18%) in August were fixed-rate inquiries, compared with just 5% in July.

Mortgage Choice also recorded a 33% increase in fixed-rate borrowers in August – rising from 15% of all loans arranged to 20%.

Three-year fixed rates are starting from as low as 5.39% – that’s 23 basis points below the lowest variable home loan rate in the RateCity database (5.62%).

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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