Westpac raises fixed rates by up to 35bps after RBA shift

The lowest standard (non-packaged) fixed rate in Westpac's line up is now 5.79% p.a. (7.96% p.a. comparison rate*) - up from 5.54% p.a. earlier this week or 5.19% p.a. in early November. 

Its lowest fixed rate is now available to owner-occupiers with loan-to-value ratios (LVRs) up to 70% fixing their rate for one year.

It comes in the wake of an RBA non-event on Tuesday, with the central bank board choosing to keep the cash rate on ice at its final meeting of 2025.

But the lack of cash rate movement didn't dampen the market's enthusiasm when RBA governor Michele Bullock fronted the press an hour after the decision was announced.

"I don't think there are interest rate cuts on the horizon for the foreseeable future," Ms Bullock said.

"The question is, is it just an extended hold from here, or is it a possibility of a rate rise? I couldn't put a probability on those, but I think they're the two things the board will be looking closely at coming into the new year."

The shift in tone was enough to lead NAB economists to label the upcoming February RBA meeting 'live' and while Westpac economists agree the risk of rate hikes has risen, they're still of the mind that a prolonged pause is the most likely outcome.

"Our current baseline is for two 25 basis point rate cuts but not until mid-2026," Westpac senior economist Justin Smirk and head of business and industry economics Sian Fenner said.

That expectation doesn't exactly line up with Friday's fixed rate increases, though lenders rarely explain the drivers behind their pricing decisions.

Westpac's latest fixed rate hike follows similar moves from Macquarie, as well as CommBank-owned Bankwest and ANZ-owned Suncorp Bank, in recent weeks.

BankSA, St George, and Bank of Melbourne, all part of the Westpac stable, also hiked fixed rates on Friday.

Westpac hikes fixed home loan rates for owner-occupiers

Westpac updated the rates across the majority of its fixed rate line up on Friday morning, impacting both its packaged and non-packaged options.

Package discounts and LVR adjustments

While Westpac advertises a standard fixed rate, the actual rate a borrower receives may be modified several times depending on whether they package their home loan and how much deposit or equity they hold. Larger deposits can attract additional discounts, while smaller deposits may trigger an added margin.

• Premier Advantage Package discount
  Westpac knocks 20 basis points off fixed rates for borrowers who sign up to its Premier Advantage Package, which carries a $395 annual fee.
  
  
• Discount for LVRs below 70%
  Packaged fixed-rate borrowers with deposits or equity of at least 30% receive a further 10 basis point discount.
  
  
• Extra charges for LVRs above 80%
  Borrowers with deposits or equity of less than 20% are charged a 30 basis point margin on their fixed rate.

With discounts applied, Westpac's lowest packaged fixed rate has risen from 4.89% p.a. in early November to 5.49% p.a. (6.00% p.a. comparison rate*) today.

The most recent changes to the bank's basic Fixed Options home loan rates, not including rate discounts or margins, as as follows:

Fixed period	Change	New rate	Comp rate*
One year	+25bp	5.79%	7.96%
Two years	+35bp	5.89%	7.75%
Three years	+30bp	5.99%	7.59%
Four years	+30bp	6.19%	7.49%
Five years	+30bp	6.19%	7.36%

Westpac hikes fixed home loan rates for investors

Meanwhile, Westpac has also upped its standard fixed rates for property investors, which are subject to the same discounts and margins as listed above.

Friday's changes to the standard rate on Westpac's fixed home loan product include:

Fixed period	Interest type	Change	New rate	Comp rate*
One year	P&I	+25bp	5.99%	8.46%
	IO	+25bp	6.04%	8.47%
Two years	P&I	+35bp	6.09%	8.22%
	IO	+35bp	6.29%	8.26%
Three years	P&I	+30bp	6.19%	8.02%
	IO	+30bp	6.39%	8.09%
Four years	P&I	+30bp	6.39%	7.90%
	IO	+30bp	6.49%	7.95%
Five years	P&I	+30bp	6.39%	7.74%
	IO	+30bp	6.49%	7.80%

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Important Information and Comparison Rate Warning

_{Image created on Canva using assets courtesy of Sardaka on Wikimedia Commons}