Westpac has announced a two-year fixed rate of 4.99%. The home loan rate is a 40 basis point reduction, and is effective from today.It's the bank's lowest two-year fixed rate offering since September 2009 and it is currently the only major bank to offer a fixed-rate home loan below 5%, though coming at a time when demand for fixed-rate products is falling.
Westpac will hope customers will consider the lower fixed-rate offering as an alternative to a variable rate mortgage (where mortgage exit fees are banned and customers can refinance relatively easily), locking them in for two-years.
NAB’s lowest fixed-rate home loan rate is 5.34% for its one-year home loan, the Commonwealth Bank offers a one-year fixed rate of 5.19% while ANZ offers a two-year fixed rate at 5.49%.
A number of smaller lenders offer fixed rate of 4.99% including ME Bank, Resi and Newcastle Permanent.
Non-bank lender Easy Street, owned and operated by Sydney-based Community First Credit Union, is offering a variable rate honeymoon home loan special rate at 4.99%
The Westpac fixed-rate cut follows its subsidiary bank St. George announced cuts to its fixed rate offerings today.
Another lender, CUA today cuts three-year fixed home loan to 5.30%, which it says is one of the lowest in the current market.
Over January, mortgage broker Mortgage Choice reported that demand for variable rate loans reached a six-month high accounting for 83.65% of the company’s new home loan approvals.
Consequently, demand for fixed rate loans slipped, for the second consecutive month, to 16.35% of newly approved loans.
Mortgage broker AFG also reported a drop in demand for fixed-rate home loans over January.