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Fixed mortgage rates starting with a ‘5’ or ‘6’ the new norm from the big four banks
Australia’s second largest home loan lender, Westpac, has today hiked fixed rates by up to 0.60 percentage points for both owner-occupiers and investors on all fixed rate terms.
Even though the majority of Westpac’s 1- to 5-year rates for owner-occupiers paying principal and interest now start with a ‘5’, the rates are still lower than its big four bank competitors.
Westpac has also today hiked its new and existing customer variable rates by 0.50 percentage points, following the RBA hike earlier this month.
Westpac FIXED CHANGES: owner-occupier principal and interest changes
– contact us for interest-only and investor changes
| Term | Old rate | New rate | Change |
| 1-yr fixed | 4.09% | 4.59% | +0.50% |
| 2-yr fixed | 4.79% | 5.39% | +0.60% |
| 3-yr fixed | 5.19% | 5.69% | +0.50% |
| 4-yr fixed | 5.29% | 5.89% | +0.60% |
| 5-yr fixed | 5.39% | 5.99% | +0.60% |
Note: Rates are for customers on a package rate with a loan-to-value ratio of 70% or less.
Westpac lowest rates – 1 year ago vs today
| Term | 1 year ago | Today | Change |
| 1-yr fixed | 1.99% | 4.59% | 2.60% |
| 2-yr fixed | 1.89% | 5.39% | 3.50% |
| 3-yr fixed | 1.98% | 5.69% | 3.71% |
| 4-yr fixed | 2.19% | 5.89% | 3.70% |
| 5-yr fixed | 2.49% | 5.99% | 3.50% |
| Lowest variable | 2.19% for 2 yrs
then 2.69% | 3.14% for 2 yrs
then 3.54% | 0.95% to intro rate,
0.85% to ongoing rate |
Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest with an LVR of 70% or less.
RateCity.com.au research director, Sally Tindall, said: “Fixed mortgage rates starting with a ‘5’ or ‘6’ are now the new norm from the big four.”
“Westpac is the latest big bank to substantially hike fixed rates, as funding costs surge. Those ultra-low fixed rates under 2 per cent are now a distant memory,” she said.
“It’s hard to believe that just a year ago Westpac was offering a 2-year fixed rate of 1.89 per cent for owner-occupiers. Now that rate has almost tripled to 5.39 per cent.
“Variable rates are also on the rise, with the RBA hiking the cash rate by 1.25 percentage points in the last three months and warning more rate increases are to come,” she said.
In a speech today, RBA Governor, Dr Philip Lowe said: "We are going through a process of steadily increasing interest rates and there's more of that to come. We've got to move away from these very low-level interest rates we had during the emergency."
“If the RBA increases the cash rate by another 2 percentage points this year, as forecast by ANZ, the average existing variable rate customer would be on an estimated rate of 6.11 per cent by Christmas. However, there are no guarantees the cash rate will get that high or stay that high, with some economists foreshadowing cash rate cuts later next year.
“The key for variable rate customers is to regularly compare their interest rate to what’s on offer to new customers. If your rate isn’t competitive, pick up the phone and haggle with your bank, or consider refinancing to a lender that’s willing to give you a decent rate,” she said.
Lowest big four bank rates for owner-occupiers paying principal and interest
(note: interest-only and investor rates are higher)
| Rate type | CBA | Westpac | NAB | ANZ |
| 1-yr fixed | 4.99% | 4.59% | 4.69% | 4.69% |
| 2-yr fixed | 5.79% | 5.39% | 5.59% | 5.49% |
| 3-yr fixed | 6.39% | 5.69% | 5.79% | 5.89% |
| 4-yr fixed | 6.59% | 5.89% | 6.19% | 5.99% |
| 5-yr fixed | 6.69% | 5.99% | 6.29% | 6.09% |
| Lowest variable | 3.29% | 3.14% for 2 years then 3.54% | 3.44% | 3.29% |
Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest. Some LVR requirements apply.
Lowest home loan rates on RateCity.com.au
| Rate type | Lender | Advertised rate |
| 1-yr fixed | Beyond Bank | 3.49% |
| 2-yr fixed | The Capricornian | 3.39% |
| 3-yr fixed | Beyond Bank | 4.79% |
| 4-yr fixed | Beyond Bank | 5.19% |
| 5-yr fixed | Beyond Bank | 5.19% |
| Lowest variable | Credit Union SA | 2.84% |
Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest. Some LVR requirements apply.
Disclaimer
This article is over two years old, last updated on July 20, 2022. 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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