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Westpac axes cashback, hikes new customer rates
Westpac has today announced it will be ending its $3,500 cashback for refinancers on 30 June as it pulls out of the chase for new customers.
Westpac is the third big bank to announce it is ending its cashback. CBA’s cashback offer ends on Wednesday, while NAB’s cashback closes on 30 June.
The cashback offer from Westpac Group’s subsidiaries, St George, Bank of Melbourne, BankSA and RAMS will remain at this stage.
Big four bank current cashback offers for refinancers
| Amount | |
| CBA – ENDS 31 MAY | $2,000 |
| Westpac – ENDS 30 JUNE | $3,500 |
| NAB – ENDS 30 JUNE | $2,000 |
| ANZ | $4,000 |
Source: RateCity.com.au
Westpac has also today hiked the rate on its basic home loan by 0.10 percentage points for new customers.
Westpac is the third big bank to hike new customer rates this week. CBA increased select package loan rates on Wednesday, while NAB increased select basic variable rates on Tuesday.
Changes to Westpac’s Flexi First loan – new customers only
For owner-occupiers paying principal and interest – contact us for other variations
| Deposit size | Old rate | New rate | Change % pts |
| More than 30% | 5.49% for 2 yrs then +0.40% | 5.59% for 2 yrs then +0.40% | +0.10 |
| 20% or more | 5.59% for 2 yrs then +0.40% | 5.69% for 2 yrs then +0.40% | +0.10 |
| Less than 20% | 5.89% for 2 yrs then +0.40% | 5.99% for 2 yrs then +0.40% | +0.10 |
Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest.
This is the second time Westpac has increased the rate on its Flexi First home loan for new customers in the last seven weeks, in addition to the standard RBA hikes.
As a result, the lowest advertised variable rate for new customers taking out Westpac’s basic home loan has risen by 0.70 percentage points since 1 March 2023, while existing customers have seen their rates rise by 0.50 percentage points – that’s 0.20 percentage points extra for these new customers.
Big four basic home loan rate rises since 1 March 2023: new vs existing customers
Includes RBA hikes and additional new customer rate rises
| Increase since 1 March 2023 | ||
| New customers (basic loan) | Existing customer | |
| CBA | 0.75% | 0.50% |
| Westpac | 0.70% | 0.50% |
| NAB | 0.75% | 0.50% |
| ANZ | 0.70% | 0.50% |
Source: RateCity.com.au. Note rate increases are for owner-occupiers paying principal and interest on the lowest advertised basic rates from the big four banks.
The big four banks collectively have now increased at least one advertised new customer rate on 14 occasions since 1 March 2023 (see table at end).
RateCity.com.au research director, Sally Tindall, said: “Westpac is the latest big four bank to pull out of the race for new customers.”
“Westpac has today announced it’s taking its cashback offer off the table, along with rate hikes for select new customers,” she said.
“As a result, new customers taking out a basic loan with Westpac will find they have to pay 0.20 percentage points more than someone who took out the exact same loan seven weeks ago.
“The big banks are falling over themselves to see who can flee the scene the fastest. They’re done with chasing new customers, even if that means growing their home loan books at a slower pace.
“The rising cost of funding has put pressure on their profit margins. The big banks want the churn in the market to end and they’re doing everything in their power to curb it.
“While CBA, Westpac and NAB have each said the chase for new customers is unsustainable, they’re madly hoping the rest of the market will follow.
“When it comes to cashback, ANZ is the last big bank standing but the $4,000 question remains – for how long?
“ANZ has said it’s willing to stay in the fight for new business. If it can keep its competitive edge, it’s likely to attract some customers that might have otherwise gone to its big bank rivals.
“Borrowers who are yet to refinance should know it is not game over. There are still plenty of lenders willing to offer sharp rates to people looking to switch. In some cases they’ll even throw in cold hard cash,” she said.
Variable rate hikes from the big four banks since 1 March 2023
Note: these hikes are in addition to RBA increases
| Date | Bank | Loan | Change (in addition to RBA hikes) |
| 1-Mar 23 | CBA | Basic variable | up to 0.10% pts |
| 1-Mar + 10-Mar 23 | NAB | Basic variable | up to 0.20% pts |
| 25-Mar 23 | CBA | Basic variable | up to 0.70% pts |
| 28-Mar 23 | ANZ | Basic variable | up to 0.21% pts |
| 31-Mar 23 | CBA | Package loan | up to 0.20% pts |
| 13-Apr 23 | Westpac | Basic variable | 0.10% pts |
| 14-Apr 23 | CBA | Package loan | up to 0.12% pts |
| 21-April 23 | ANZ | Basic variable | up to 0.10% pts |
| 28-April 23 | NAB | Basic variable | up to 0.05% pts |
| 12-May 23 | CBA | Basic + package | up to 0.10% |
| 23-May 23 | NAB | Basic variable | up to 0.10% pts |
| 24-May 23 | CBA | Package loan | up to 0.10% pts |
| 26-May 23 | Westpac | Basic variable | 0.10% pts |
Source: RateCity.com.au
Big four banks new lowest advertised rates
| With offset | No offset | |
| CBA | 5.89%
+ $395 annual fee | 5.87% |
| Westpac | 6.94%
+$395 annual fee | 5.59%
for 2 yrs then +0.4%pts |
| NAB | 7.07%
+$8 / mth fee | 5.99% |
| ANZ | 6.74%
+$10 / mth fee | 5.79% |
Source: RateCity.com.au. Note: rates are for owner-occupiers paying principal and interest. Loan-to-value ratios apply.
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Product database updated 19 Nov, 2024
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