Westpac passes on 20 bps rate cut to borrowers
Westpac will reduce interest rates on its standard variable mortgage by 20 basis points to 6.89% from 18 June 2012.
This follows big four rival ANZ passing on all 25 basis points earlier today with its standard variable rate falling to 6.8% from June 15.
Customers on Westpac’s Premier Advantage Package who receive a minimum 0.7 percentage point discount on the headline standard variable mortgage will see their new effective rate fall to 6.19%.
The reduction in home loan rates will save home owners $41 a month or $492 a year in total monthly repayments on an average mortgage of $300,000.
Since October 2011, Westpac has cut its variable mortgage rates by 97 basis points out of the 125-basis-point reduction in the cash rate since November last year.
“This has been a difficult decision as we have sought to balance the needs of our mortgage customers with those of our millions of savers, particularly retirees who depend on the income from their deposit accounts,” says Westpac Group executive retail and business banking Jason Yetton.
“We also fully appreciate the financial pressures that many households are currently facing even though the economy as a whole is doing well as the latest GDP and job figures released this week showed. That is why we continue to offer discounts on our headline mortgage rate which will see nearly 90% of our home loan customers pay no more than 6.19%.
“And for those borrowers who are looking for security and peace of mind over a longer period given the current financial uncertainty we have also been able today to reduce the rate on our most popular fixed home loan rate, the three year term, to 5.89% once the discount that we offer is taken into account. This new rate will be effective next week.”
“Small businesses will also benefit from the interest rate cuts with cuts in certain headline variable loans of 25 bps. “This is the second time in consecutive months that we have reduced the interest rate on certain variable business loans,” he said.
“Despite increased funding costs, we recognise that it is particularly important at this time to help small business in this way given the critical part this sector plays in supporting the economy and maintaining employment as a whole.”