Big banks join low rate mortgage war

Westpac announces amazing new low rates and first major regional bank goes under 3%*

Westpac slashes home loan rates by up to 1.30%.

Westpac has announced out-of-cycle variable and fixed home loan rate cuts for owner-occupiers and investors taking its lowest advertised rate to just 3.24 per cent pa.

And Australia’s biggest mutual bank, Heritage Bank, has announced a new fixed rate under 3 per cent.

These big cuts follow the growing number of online non-bank lenders announcing extraordinary low home loan rates, many under three per cent p.a.

The new lowest advertised home loan rate now listed by InfoChoice is 2.74 per cent pa on a two-year fixed loan (Comparison rate 2.96%) and three-year fixed loan (comparison rate 2.94% pa) from Well Home Loans.

“The rates from the online lenders are too low to ignore,” said Vadim Taube CEO of leading Australian financial comparison site InfoChoice.com.au.

“And the big banks aren’t ignoring them, they are reacting by cutting their own rates.

“Competition in the mortgage market is heating up and borrowers can get amazing low rates by researching the good deals.”

Westpac have delivered an effective 0.15 per cent rate cut on their low rate basic mortgage product, the Flexi First Option Loan by increasing an existing discount offer.

The new Flexi First Option variable rate (P&I) is 3.43 per cent pa (comparison rate 3.44 per cent pa). For LVRs under 70 per cent, the Flexi Option rate is 3.38 per cent pa (comparison rate 3.39 per cent pa).

Westpac’s new 12-month fixed Flexi Option (P&I) rate is 3.29 per cent pa (comparison rate 4.05 per cent pa). That is a 0.80 per cent cut from the previous 12-month fixed rate of 4.09 per cent.

Westpac’s 12-month rates now start at 3.24 per cent pa (comparison rate 4.01 per cent) on a packaged loan up to 70% LVR.

Westpac’s Will Ranken, General Manager Home Ownership told InfoChoice:

“Today’s changes provide a competitive offering for both property investors and owner occupiers.

“The current low interest rate environment is driving competitive offers for home buyers, which coupled with the new home loan incentives and discounts available may make it an appealing time for Australians to start thinking about purchasing a home.”

Heritage Bank has reduced fixed rate home loan rates by up to 0.30 per cent and some owner occupier rates by up to 0.10 per cent. Investor variable interest rates have come down by up to 0.15 per cent.

Heritage’s lowest rate is now 2.99 per cent pa (comparison rate 6.67 per cent pa) on the Home Advantage Package three-year fixed rate for owner-occupied (P&I).

How many lenders are offering home loan rates under 3%?

Loan type Lenders offering <3% on home loans Lowest rate in market Lowest Big Four bank home loan rate
Variable 2 lenders (5 loan products) 2.89% pa (CR 2.90%) from Reduce Home Loans 3.34 % pa (CR 3.39%) NAB Base variable (P&I, 80% P&I)
12m fixed 9 lenders (13 loan products) 2.79% pa (CR 3.95%) from Greater Bank 3.24% pa (CR 4.01%) Westpac First Options (packaged)
2y fixed 13 lenders (21 loan products) 2.74% pa (CR 2.96%) from Well Home Loans 3.09% pa (CR 4.49%) NAB National Fixed Choice (P&I, first home buyer special)  
3 year fixed 20 lenders (29 loan products) 2.74 % pa (2.94% pa) from Well Home Loans 3.23% pa (CR 3.94%) Westpac Fixed Option (packaged LVR <70%)

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