Westpac cuts interest rates for home owners and business
8 June 2012
- Headline standard variable mortgage cut by 0.20% to 6.89%
- Most Westpac standard variable mortgage rate customers will move to the new Premier Advantage Package discount rate of 6.19%
- New three year fixed rate home loan offer – now 5.89% with discount
- Key headline variable small business loans reduced by 25 bps
Westpac today announced it will reduce interest rates on its standard variable mortgage rate loans by 0.20 percentage points to 6.89%. The new rate takes effect from 18 June 2012.
Customers on Westpac’s Premier Advantage Package who receive a minimum 0.7 percentage point discount on the headline standard variable mortgage will see their new effective rate fall to 6.19%.
The reduction in home loan rates will save homeowners $41 a month or $492 a year in total monthly repayments on an average mortgage of $300,000. Since October 2011, Westpac has cut its variable mortgage rates by 0.97 percentage points, equating to an annual saving of $2,388 on an average home loan.
Westpac Group Executive Retail and Business Banking Jason Yetton said: “This has been a difficult decision as we have sought to balance the needs of our mortgage customers with those of our millions of savers, particularly retirees who depend on the income from their deposit accounts.
“We also fully appreciate the financial pressures that many households are currently facing even though the economy as a whole is doing well as the latest GDP and job figures released this week showed. That is why we continue to offer discounts on our headline mortgage rate which will see nearly 90 per cent of our home loan customers pay no more than 6.19%.
“And for those borrowers who are looking for security and peace of mind over a longer period given the current financial uncertainty we have also been able today to reduce the rate on our most popular fixed home loan rate, the three year term, to 5.89% once the discount that we offer is taken into account. This new rate will be effective next week.”
Small businesses will also benefit from the interest rate cuts with cuts in certain headline variable loans of 25 bps. “This is the second time in consecutive months that we have reduced the interest rate on certain variable business loans,” said Mr Yetton.
“Despite increased funding costs, we recognise that it is particularly important at this time to help small business in this way given the critical part this sector plays in supporting the economy and maintaining employment as a whole.”
The price of deposits including term deposits had a major impact on Westpac’s decision. “While these have come down in the past few weeks, they still remain high and there remains intense competition for this form of funding. This has been great news for savers but it has meant increased pressure on banks when we consider borrowing rates,” added Mr Yetton.
“At the same time, we have experienced yet another bout of global instability as a result of the European debt crisis. This continues to unsettle financial markets and has prompted yet another spike in wholesale funding costs which has added to the pressure on our own finances.”
Westpac has a range of mortgage options available to customers including splitting loans between fixed and variable rates as well as a number of competitive fixed rate mortgages.
Mr Yetton encouraged customers to discuss their banking arrangements with their local Bank manager or contact Westpac on 132 558 to ensure they have the right mortgage product to suit their Individual requirements.