Westpac has announced that it will be passing on the Reserve Bank’s August 0.5-percentage-point hike in full to its variable home loan customers.
The major bank said it will also increase its lowest variable rate by 0.35 percentage points for new customers, taking its lowest variable rate to 3.49% for two years, after which time it increases by 0.4 percentage points. To get this rate, borrowers will need to be new to the bank and own at least 30% of their home.
RateCity.com.au showed the changes to Westpac’s home loan rates:
|
|
Old rate |
New rate |
Change (% points) |
|
Standard variable |
5.73% |
6.23% |
+0.5% |
|
Discounted variable |
4.44% |
4.94% |
+0.5% |
|
Lowest variable (new customers) |
3.14% for 2yrs then 3.54% |
3.49% for 2yrs then 3.89% |
|
Note: Home loan rates are for owner-occupiers paying principal and interest with a 70% LVR.
“Westpac’s new lowest variable rate at 3.49% is extremely competitive, but it comes with plenty of catches,” said Sally Tindall, RateCity.com.au research director. “This rate is exclusively reserved for new customers with a decent amount of equity in their home. The discount also only lasts for two years, after which time it automatically jumps up by 0.40 percentage points.”
Tindall said that with new customers getting a better deal, loyal existing customers may find this difficult to swallow.
“Instead of getting angry, get even,” she said. “Have a look at what your bank is offering new customers, but also what other lenders will offer you. If it’s lower, pick up the phone and ask the bank to cut you a better deal. Once the August hikes filter through, a competitive interest rate for owner-occupiers is likely to be around 3.5%. If your rate starts with a ‘4’ or even a ‘5’ as an owner-occupier, then you really should question why.”
