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Westpac Group cuts new customer rates in a bid to boost its home loan book
Australia’s second largest bank, Westpac, has today cut its basic variable rate to 2.69 per cent, but the offer is solely reserved for new customers with a deposit of more than 30 per cent.
Westpac’s new rate is now the lowest variable home loan offered by a big four bank.
Westpac Flexi First Option Home Loan changes:
| Loan to value ratio (LVR) | Old rate | New rate | Difference |
| Less than 70% | 2.93% | 2.69% | -0.24% |
| Above 70% | 3.03% | 2.79% | -0.24% |
Note: above rates are advertised rates for owner-occupiers paying principal and interest who are new customers to Westpac.
Westpac Group’s St George, Bank of Melbourne and BankSA also cut several new customer rates today including:
- St George and Bank of Melbourne are now offering variable rates from 2.59% for new customers with a 60% LVR (0.10% cut).
- BankSA is offering variable rates from 2.64% for new customers (0.10% cut).
The changes come as Westpac Group posted a drop in their home loan book, according to APRA’s monthly banking statistics for April 2020 (released May 29).
RateCity research director, Sally Tindall, said the cuts from Westpac weren’t unexpected.
“Yesterday Westpac had the highest basic variable rate out of the big four banks. Today it has the lowest,” she said.
“Today’s rate cut is designed to get new business in the door. Westpac Group’s home loan book has fallen month-on-month, according to the latest APRA statistics. They need new customers to keep moving in the right direction.
“While these rate cuts are reserved for new customers, if you’ve already got a loan with Westpac you can still pick up the phone and ask for a rate cut. If you’re paying more than what the bank is offering new customers for exactly the same loan, you’ve got the perfect bargaining chip.
Today’s rate cuts are further evidence of the competitiveness of the market.
“Increasingly banks are reserving their lowest rates for new customers who have a decent amount of equity up their sleeve,” she said.
“The three lowest variable rates on the RateCity database are reserved for owner occupiers, paying principal and interest who have at least 30 to 40 per cent deposit.
“If you’re an owner-occupier who has made decent headway into your loan and still has a steady job, you are in the drivers’ seat in this current market,” she said.
Lowest variable rates on RateCity
| Lender | Loan | Advertised rate | Loan to value ratio required |
| Reduce Home Loans | Low Rider | 2.29% | 70% |
| Homestar Finance | Star Gold | 2.29% | 60% |
| Freedom Lend | Freedom Variable | 2.29% | 60% |
Big Four Bank lowest rates
| Lender | Advertised variable | Advertised 2-yr fixed | Advertised 3-yr fixed |
| CBA | 2.79% | 2.29% | 2.29% |
| Westpac | 2.69% | 2.19% | 2.19% |
| NAB | 2.84% | 2.29% | 2.29% |
| ANZ | 2.72% | 2.29% | 2.29% |
Note: Rates are for owner occupiers paying principal and interest. Westpac’s rates are for customers with a loan-to-value ratio of less than 70 per cent.
APRA monthly banking statistics - Loans to households: home loans
| Bank | % share of home loans among all ADI’s (April 2020) | Monthly change in bank’s home loan book % (March to April 2020) | Year on year change in home loan book % (April 19 - April 20) |
| CBA | 25.70% | 0.40% | 4.74% |
| Westpac Group | 23.19% | -0.31% | -0.64% |
| NAB | 14.94% | 0.19% | 0.12% |
| ANZ Group | 14.05% | 0.27% | -1.09% |
| ING Bank (Australia) | 2.93% | 0.14% | 5.02% |
| Macquarie Bank | 2.77% | 2.38% | 33.03% |
| Bendigo and Adelaide Bank | 2.52% | 0.47% | 8.30% |
| Suncorp-Metway | 2.46% | -0.20% | 0.16% |
| Bank of Queensland | 1.61% | -1.73% | 0.61% |
| HSBC Bank Australia | 1.23% | 1.23% | 20.51% |
Notes: Data is from APRA monthly banking statistics, released 29 May 2020 and includes all authorised deposit taking institutions (ADI's). Includes owner occupier and investor home loans. The percentage share of home loans does not include loans from non-ADI lenders.
Disclaimer
This article is over two years old, last updated on June 5, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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