Westpac cuts fixed rates ahead of RBA
Westpac has cut its fixed-rate mortgages a week ahead of the Reserve Bank of Australia (RBA) meeting, now reaching the lowest fixed rate of the “big four” banks.
Westpac has cut its fixed-rate mortgages across its one- and two-year loan terms, following NAB’s initiative, which slashed all its fixed-rate mortgages in the first week of February.
Canstar.com.au’s rate tracking showed that Westpac reduced its rate by 0.40 percentage points for owner-occupier loans with a one-year term, and by 0.30 percentage points for loans with a two-year term.
Westpac’s lowest fixed rate now reaches 5.59 per cent and is available for owner-occupiers on a two-year term, paying principal and interest with a deposit of at least 30 per cent.
Australia’s second-largest lender also reduced its fixed investor loan rate by 0.35 percentage points.
Westpac’s move follows NAB’s initiative to cut fixed rates earlier in February and Macquarie Bank in mid-January.
As a result, Westpac now has the lowest 1-, 2-, 4- and 5-year fixed rates among the big four banks.
For a one-year term based on owner-occupied loans with principal and interest repayments, Westpac now has the lowest rate at 5.69 per cent, while CBA has the highest rate at 6.39 per cent.
According to Canstar data, CBA has the highest fixed interest rates of the big four banks across all fixed-term loans.
Westpac’s one-year fixed rate is now one of the lowest rates in the market, alongside Macquarie Bank, at 5.69 per cent.
However, Macquarie Bank still offers lower rates on a two- or three-year fixed rate at 5.55 per cent for owner-occupiers paying principal and interest with a deposit of at least 30 per cent.
The lowest fixed rates in the market on a fixed two-year term for owner-occupiers are at BankVic, Community First and Easy Street, with 5.49 per cent, while Westpac sits at 5.59 per cent.
Canstar data insights director, Sally Tindall, said that despite Westpac having the lowest fixed loan of the major banks, borrowers will still be waiting for a rate cut at the RBA meeting.
“CBA’s half-yearly results, released today, illustrate just how unpopular fixing is. Only 1 per cent of new mortgages taken out with the bank in the last quarter of 2024 opted for a fixed rate, in dollar terms,” Tindall said.
“After waiting well over a year for cash rate cuts to come, it’s hard to see many borrowers tossing this opportunity in.”
“This, alongside an easing in the cost of wholesale funding, is now pushing some banks to review their fixed rates, with more likely to follow,” Tindall said.
The next RBA meeting is set for 18 February 2025, with Tindall forecasting a possible rate cut “fast approaching, potentially as soon as next Tuesday”.