Westpac has unveiled a market leading fixed home loan rate one week before the central bank is expected to cut.
The big four bank dropped rates on its one- and two-year fixed home loan products by as much as 40 basis points on Wednesday, with the lowest rate in its stable now 5.59% p.a.
That's offered to owner-occupiers with loan-to-value ratios (LVRs) of 70% or less who fix their rate for two years and is inclusive of the bank's Premier Advantage Package discount.
For borrowers not looking to fix their rate for so long, Westpac also dropped the advertised rate on its one year fixed product to as low as 5.69% p.a. – equal with the lowest of its kind available right now.
The bank's move comes amid anticipation of a cash rate cut.
The Reserve Bank of Australia board will enter its first meeting of 2025 on Monday with its decision to be announced on Tuesday.
The vast majority of experts and market participants predict the meeting will see the RBA hand down its first cut since 2020.
That could see the cash rate fall by 25 basis points, from its current high of 4.35% down to 4.10%.
Westpac chief economist Luci Ellis was among those changing their outlook on the interest rate cycle last month, following the release of the latest inflation data.
"We have just enough evidence to conclude that disinflation has proceeded faster than the RBA expected, so the board will have the required confidence to start the rate-cutting phase in February," Ms Ellis said at the time.
So, with all that considered, here are the latest changes to Westpac's fixed home loan interest rates:
Owner-occupiers offered rates as low as 5.59% p.a.
Homeowners looking to fix their interest rates ahead of a potential RBA cutting spree could realise a significant discount on Westpac's advertised variable rates.
The big four bank currently advertises a variable two-year introductory rate of 6.44% p.a. (6.76% p.a. comparison rate*) to owner-occupiers with LVRs of 70% or less.
That's compared to these new fixed rates, which include the bank's Premier Advantage Package discount:
| Fixed period |
LVR | New rate |
Comp rate* |
|---|---|---|---|
| One year |
≤70% | 5.69% (-40bp) |
7.60% |
| 70-80% | 5.79% (-40bp) |
7.70% | |
| >80% | 6.09% (-40bp) |
8.00% | |
| Two years |
≤70% | 5.59% (-30bp) |
7.42% |
| 70-80% | 5.69% (-30bp) |
7.51% | |
| >80% | 5.99% (-30bp) |
7.80% |
Investor rates from 5.99% unveiled
Meanwhile, investors making principal and interest (P&I) or interest only (IO) could realise these newly-lowered fixed rates, which include the bank's Premier Advantage Package discount:
| Fixed period |
Rate type |
LVR | New rate |
Comp rate* |
|---|---|---|---|---|
| One year |
P&I | ≤70% | 5.89% (-35bp) |
8.11% |
| 70-80% | 5.99% (-35bp) |
8.20% | ||
| >80% | 6.29% (-35bp) |
8.50% | ||
| IO | ≤70% | 6.09% (-30bp) |
8.12% | |
| 70-80% | 6.19% (-30bp) |
8.22% | ||
| >80% | 6.49% (-30bp) |
8.52% | ||
| Two years |
P&I | ≤70% | 5.79% (-30bp) |
7.88% |
| 70-80% | 5.89% (-30bp) |
7.98% | ||
| >80% | 6.19% (-30bp) |
8.27% | ||
| IO | ≤70% | 5.99% (-20bp) |
7.91% | |
| 70-80% | 6.09% (-20bp) |
8.01% | ||
| >80% | 6.39% (-20bp) |
8.30% |
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Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Extra Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
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Image by Sam Wilson via Wikimedia Commons
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