Westpac has announced a cut of up to 35 basis points on its variable home loan rates. The significant move by the second-largest lender has shaken up the market, matching the lowest rate offered by any of the big four banks.
The variable rate for new customers will go down to 5.84 percent as the Westpac gearing up to intensify the ongoing competition among banks.
The new customers can take advantage of the Flexi First Option special rate offer, but with a significant catch. The Borrowers must apply online and provide a 30 percent deposit to access the lower rate.
Westpac’s new rate is 0.35 percent lower than its previous lowest variable rate of 6.19 percent.
The bank hasn’t made any changes to its other existing home loan rates.
Canstar’s data insights director, Sally Tindall, said the bank’s rate cut will attract more new customers.
“Westpac’s rate cut now puts it on par with ANZ for the lowest advertised variable home loan rates,” Tindall said.
“The big four is still trying to lure customers. ANZ has led the pack with the lowest variable rate through its digital home loan. With the current move, Westpac has jumped ahead of CBA and left NAB trailing.”
“With the digital home loan, the three of the big four banks are competing aggressively. This is a great news for new homeowners, but the lowest rates are only available to new customers with sizable deposits.”
The latest data revealed by ABS states that over $205 billion worth of loans were refinanced in 2024 financial year.
Canstar expects after the RBA’s February cut, the refinancing activity will rise again, as the central bank lowered the official cash rate to 4.10 percent.
Tindall said Westpac’s move to change the variable home loan rates will heat up the market, and the refinance market will surge again.
“The major banks are eyeing new ideal borrowers who are willing to deposit large amount and switch to online” she said.
Ms. Tindall also pointed out that homeowners could find better rates outside the big four banks.
As per the Canstar data, more than 35 lenders offering at least one variable rate below 5.64 percent.
The lowest advertised refinance rate currently stands at 5.64.
Pacific Mortgage Group, People’s Choice, RACQ Bank, The Capricornian, and Australian Mutual Bank are all tied at that rate.
