Westpac have struck the latest blow in the home loan rate price war, with a new offer that is the lowest available on the Australian market.
The Big Four bank announced rates at just 1.79% for two year fixed home loans and 1.88% for three year fixed mortgages, which will be spread across their own brand and their subsidiaries such as St George Bank, Bank of Melbourne and BankSA.
With the Reserve Bank of Australia steadfastly keeping their rate down to 0.1% and the housing market continuing to boom, it has sparked a price war within the major players in the home loan industry.
NAB currently have the highest rate of the Big Four, at 2.44%, with ANZ at 2.24% and CBA at 2.14%, though industry expectations are now that all three may well cut their rates in order to keep up with Westpac.
“This is a fantastic product for a Big Four bank to come out with, and will be coming up in all the searches for brokers,” said Raj Ladher of YourMortgage.com.au. “It’s crazy how low interest rates have got and this is superb for consumers.
“This is the perfect time to get out their bank statement, check what their rate is and then ask some hard questions of their lender. There’s a good chance that the other majors will have to follow suit, too.”
This is the second major rate cut that Westpac has announced recently. Last Thursday, they dropped their SME Guarantee rate on to beneath 4% on unsecured fixed rates, with 3-5 year variable loans also falling.
“The rate cuts will help brokers start conversations with their clients as Australia begins to move out of recession and back towards growth, albeit slowly,” Westpac Business Division Chief Executive Guil Lima told Australian Broker last week. “If you look at what the RBA has said, low rates are essential to help our economy grow again.”