Westpac cuts interest rates for home owners to their lowest in 50 years
06 May 2015
- Headline mortgage standard variable rate cut by 0.22%p.a. to 5.48%p.a. (comparison rate 5.62%p.a.*), effective 18 May 2015
- Headline variable business lending rate cut by 0.25% p.a.
- Introduction of a special rate of 3.05% p.a. for 9 month new term deposits, effective 18 May 2015 for personal customers1.
- Westpac customers have benefited from a total cut of 0.50%p.a. on the mortgage standard variable rate this year, equal to the total cut in the RBA rate this year2
- Most Westpac standard variable mortgage customers who receive a minimum rate discount of 0.70%p.a. will move to the new Premier Advantage Package discount rate of 4.78%p.a. (comparison rate 5.16%p.a.*)
Jason Yetton, Group Executive of Westpac Retail and Business Banking, said today's decision carefully balanced the different needs of the bank's home loan customers, business customers and millions of savers, including retirees.
"Today's decision on mortgage rates takes the total reduction this year in the standard variable rate to 0.50%p.a. We also wanted to recognise how important it is to maintain competitive savings rates for our depositors, many of whom are young people saving for a home and retirees," said Mr Yetton.
"Increasing our deposit rate in this low-rate environment will also assist many retirees who have seen a significant reduction in income over the last two years.
"Passing on the full rate for business customers should help improve confidence among business owners who are the backbone of Australia's economy," said Mr Yetton.
"Our mortgage rates are now at their lowest in 50 years. Today's reduction in home loan rates, coupled with the 0.28%p.a. reduction announced in February, will save homeowners on the Premier Advantage Package, approximately $1,104 a year in repayments on an average mortgage of $300,000."
Mr Yetton also said the finances of Westpac's home-owning customers were in good shape with more than 67% of our customers3 ahead in their mortgage repayments.
Under the Premier Advantage Package new borrowers, including customers looking to upgrade their home, will be able to take advantage of a 0.90%p.a. discount on the latest headline standard variable rate if they take out a loan above $250,000. This means they would pay no more than 4.58%p.a. (comparison rate 4.96%p.a.*) on the current rate.
Homeowners looking for security and peace of mind about their mortgage repayments could choose to fix all or part of their mortgage through attractive fixed rate4 package discount offers including a two year rate of 4.59%p.a. (comparison rate 5.12%p.a.*) or a three year rate of 4.69%p.a. (comparison rate 5.13%p.a.*).
Note to Editors:
Westpac has a range of mortgage options available to customers including splitting loans between fixed and variable rates. Customers are encouraged to discuss their banking arrangements with their local Bank manager or contact Westpac on 132 558 or visit www.westpac.com.au to ensure they have the right mortgage product to suit their individual needs.
* The comparison rate is based on a Rocket Repay Home Loan of $150,000 over a term of 25 years. This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
1 Full terms and conditions of the Term Deposit special rate offer, including the applicable deposit amount and interest payment frequency, will be available from 18 May 2015. Read the terms and conditions and Important Information Document before making a decision and consider whether the product is appropriate for you.
2 Westpac moved its Standard Variable Rates down by 0.28%p.a. on 20 February 2015
3 On average over the last 12 months.
4 Fixed rate at settlement will apply unless you lock in a lower rate (fee applies). Fixed rate reverts to applicable variable home loan rate.