Westpac is cutting its fixed rates across its two, three, four and five-year loans by 10 to 15 basis points, claiming it will have the best rates out of the big four.
The changes, effective tomorrow, relate to its Fixed Rate Home and Investment Property Loans, reducing the two and three-year rates from 5.89% and 5.84% respectively, to 5.54% for its Premier Advantage Package.
Both its four and five-year rates will reduce by 10 basis points, to 6.09%.
Meanwhile, the current spate of cuts across majors and non-majors is seeing some brokers actively encouraging clients to fix.
“Over the last few months, we have been active in saying to people ‘rates are low’ historically,” Adelaide broker Cathy Anderson told Australian Broker Online.
“It links back to the issue of arrears and hardship. Assessing people’s affordability: it’s great to get the cheap rate, but can you afford it on the higher rate? That’s why fixed can work,” she said.
She claimed the 50/50 split between fixed and variable wasn’t ideal; instead brokers should encourage clients to fix the majority of their loan with a small portion dedicated to variables “for flexibility.”
“I think when people say 50/50 they’re not actually looking at the client’s needs,” she said.
“It’s more based on affordability. If you’ve say got a $400k loan, maybe you should fix $300k and have the other $100k variable, so that you’ve got that flexibility.”