Westpac joins big four rivals in hiking new customer variable rates

Westpac has today increased the rate on its basic mortgage by 0.10 percentage points for owner-occupiers and investors – but only for new customers.

From today, Westpac’s lowest variable rate is 5.24 per cent, however, the rate increases by 0.40 percentage points after two years. Existing customers are not impacted.

This move is the latest in a round of small but significant rate hikes from Australia’s biggest four banks, and are in addition to their standard RBA hikes.

Westpac’s Flexi First Option changes

Owner-occupiers paying principal and interest. New customers only. 

Source: RateCity.com.au.

Big bank additional rate hikes for new customers – past 6 weeks

• 1 March: CBA increases the rate on its basic home loan (Extra Home Loan) for borrowers with less than 70 per cent by 0.10 percentage points.
• 1 March & 10 March: NAB increases the rates on its basic home loan (Base Variable) by up to 0.20 percentage points. (Loans with over 80% LVR increased on 1 March, loans under 80% increased 10 March).
• 25 March: CBA increases the rate on its basic home loan (Extra Home Loan) for the majority of loan tiers by up to 0.70 percentage points.
• 28 March: ANZ increases the rate on its basic home loan (Simplicity Plus) for most loan tiers by up to 0.21 percentage points.
• 31 March: CBA increases the rates on its package home loan (Wealth Package) for the majority of loan tiers by up to 0.20 percentage points.
• Today: Westpac increases the rate on its basic home loan (Flexi First Option) by 0.10 percentage points.

RateCity.com.au research director, Sally Tindall, said: “For months the big banks have been fighting tooth and nail for new customers, however, this competitive streak is starting to wane.”

“All four big banks have now walked back some of their new customer discounts as they feel the heat from the rising cost of funding,” she said.

“That said, these relatively minor rate rises aren’t going to put the big four out of the refinancing game entirely. With almost $20 billion worth of refinanced loans up for grabs each month, Australia’s biggest banks are still aiming for a decent slice of this pie. 

“Westpac’s lowest variable rate is still a competitive 5.24 per cent, which includes a 0.40 percentage point discount for the first two years. Coupled with a $3,500 cashback for refinancers looking to switch, that’s still a reasonably competitive deal in the short term.

“However, anyone looking to set and forget their home loan might be better off looking for a lower rate, particularly if they’re saddled with significant amounts of debt.

“This spate of new customer rate rises doesn’t necessarily mean you’ve missed the refinancing boat, although you might want to look beyond the big four banks if you’re after an ultra-low rate,” she said.

Big four banks’ variable rates for owner-occupiers

Source: RateCity.com.au. Note: rates are for new customers who are owner-occupiers paying principal and interest. LVR requirements apply. Annual fees apply for loans with offset accounts.

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