Westpac will reduce its variable home loan rates in response to the Reserve Bank of Australia's decision to lower the cash rate to 3.85% at its May meeting. 

The change will see Westpac pass on the full 25 basis point reduction to both new and existing variable-rate home loan customers.

That could see the bank's lowest advertised variable rate fall to 5.59% p.a., down from 5.84% p.a., on its Flexi First Option Home Loan for eligible refinancers.

For a homeowner with a $500,000 mortgage, the change could reduce monthly repayments by nearly $80 – from $2,947 to $2,867 – a saving of more than $950 per year.

Westpac follows CommBank, NAB, and ANZ in announcing its response to the RBA's cut, while other major lenders are expected to reveal their positions soon.

The rate cut will benefit both owner-occupiers and investors on variable rates.

The bank is the only big four bank that automatically lowers homeowners' mortgage repayments on the back of a rate cut, though borrowers shouldn't assume that will be the case as it can depend on certain conditions.

Customers on fixed rate home loans won't see any change unless they roll off to a variable rate in the near future.

The announcement comes just one month after Westpac made adjustments to its offset home loan offerings, slashing more than 100 basis points from rates on the coveted line up.

The bank also launched the competitive refinancing rate on its Flexi First Option mortgage product in March, sparking whispers of a refinancing war that hasn't yet materialised.

Westpac is encouraging any customers experiencing financial difficulty to reach out, with hardship support available through the bank's dedicated assistance channels.

See how other lenders are responding to the RBA's May rate cut: Your Mortgage rolling coverage

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LenderHome LoanInterest 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 TagsFeaturesLinkComparePromoted ProductDisclosure
5.54% p.a.
5.58% p.a.
$2,852
Principal & Interest
Variable
$0
$530
90%
  • Owner Occupier
  • Variable
  • Principal & Interest
  • 10% Min Deposit
  • Redraw
  • Extra Repayments
  • More details
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Dedicated loan specialist throughout the loan application.
 Disclosure
5.49% p.a.
5.40% p.a.
$2,836
Principal & Interest
Variable
$0
$0
80%
  • Built and funded by CommBank
  • Owner Occupier
  • Variable
  • Principal & Interest
  • 20% Min Deposit
  • Redraw
  • More details
  • A low-rate variable home loan from a 100% online lender.
  • Backed by the Commonwealth Bank.
 Disclosure
5.64% p.a.
5.68% p.a.
$2,883
Principal & Interest
Variable
$0
$530
90%
  • Owner Occupier
  • Variable
  • Principal & Interest
  • 10% Min Deposit
  • Offset
  • Redraw
  • Extra Repayments
  • More details
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Quick and easy online application process.
 Disclosure
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

Important Information and Comparison Rate Warning

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