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A big four bank has announced reductions to investor home loan rates, applying to both new and existing customers.
Westpac has reduced investor fixed rates for new and existing borrowers with both principal and interest (P&I) or interest-only (IO) terms, effective from Wednesday, 22 January.
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For P&I borrowers with a Fixed Rate Investment Property Loan:
- one-year fixed rates have been cut by 50 bps to 3.19 per cent (4.40 per cent comparison rate)
- two-year fixed rates have been cut by 19 bps to 3.09 per cent (4.30 per cent comparison rate)
- three-year fixed rates have been cut by 19 bps to 3.09 per cent (4.22 per cent comparison rate)
- four-year fixed rates have been cut by 50 bps to 3.19 per cent (4.18 per cent comparison rate)
- five-year fixed rates have been cut by 50 bps to 3.19 per cent (4.12 per cent comparison rate)
For IO borrowers with a Fixed Rate Investment Property Loan:
- one-year fixed rates have been cut by 40 bps to 3.39 per cent (4.64 per cent comparison rate)
- two-year fixed rates have been cut by 20 bps to 3.29 per cent (4.54 per cent comparison rate)
- three-year fixed rates have been cut by 20 bps to 3.29 per cent (4.46 per cent comparison rate)
- four-year fixed rates have been cut by 40 bps to 3.39 per cent (4.41 per cent comparison rate)
- five-year fixed rates have been cut by 40 bps to 3.39 per cent (4.35 per cent comparison rate)
Westpac told brokers that the rate changes exclude any loan-to-value ratio discounts for new borrowers.
The major bank also noted that the rate reductions would only apply if the loan is secured under the Premier Advantage Package, which incurs an annual fee of $395.
Commenting on the changes from Westpac, Steve Mickenbecker, comparison site Canstar’s finance analyst, said the reductions were a reflection of heightened competition in the mortgage market.
“You know the home loan market has become competitive when a loan from a major bank has the top rate in its category,” he said.
Mr Mickenbecker added that Westpac’s decision is also aimed at luring investors back to its ranks.
“The investment lending market has remained sluggish, as lending to owner-occupiers has shown recovery, and Westpac is clearly working to lift its share of that market,” he said.
Westpac’s changes come just weeks ahead of the Reserve Bank of Australia’s (RBA) next monetary policy board meeting.
Analysts are expecting the central bank to drop the official cash rate to 0.5 per cent, which would mark the fourth cut since the easing cycle commenced in June 2019.
An additional 25 bps reduction to the cash rate would place further downward pressure on mortgage rates, with the RBA’s previous cuts prompting lenders to reprice their offerings.
[Related: Lender rolls out ‘green’ home loan]
