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Australia’s lowest four-year fixed rate gone as Westpac hikes rates

Australia’s lowest four-year fixed rate gone as Westpac hikes rates

Australia’s second biggest bank, Westpac, and its subsidiaries, have today hiked their four- and five-year fixed rates.

Westpac’s four-year fixed rate was previously the lowest four-year fixed rate on the market and on RateCity.com.au’s records.

Westpac isn’t alone, with an increasing number of lenders beginning to hike four-year fixed rates across the market, including Commonwealth Bank and Bankwest.

RateCity database analysis:

  • 24 lenders have hiked at least one 4-year fixed rate in the last two months.
  • 1.95% is the new lowest 4-year fixed rate from BankVic.
  • 6 lenders are now offering 4-year fixed rates under 2 per cent.
  • NAB is the only big four bank now offering a 4-year fixed rate under 2 per cent.

Westpac Group home loan changes

4-year fixed rates5-year fixed rates
Lowest fixed ratesOld rateNew rateChangeOld rateNew rateChange
Westpac

1.89%

2.19%

0.30%

2.19%

2.49%

0.30%

St George

1.89%

2.19%

0.30%

2.19%

2.49%

0.30%

Bank of Melbourne

1.89%

2.19%

0.30%

2.19%

2.49%

0.30%

BankSA

1.99%

2.29%

0.30%

2.29%

2.59%

0.30%

Note: the above rates are for owner occupiers paying principal and interest on a package home loan. Westpac rates require a loan to value ratio (LVR) of 70% or less, St George and Bank of Melbourne rates require an LVR of 60% or less. Data accurate as of 28.04.2021.

RateCity research director, Sally Tindall, said: “This move from Westpac could be the end of an era for ultra-low four-year fixed rates.”

“Westpac held out as long as it could, but with a cash rate hike on the cards in 2024 and the RBA’s term funding facility wrapping up in a couple of months, the bank’s record-low four-year fixed rate was unsustainable,” she said.

“Westpac’s 1.89 per cent four-year fixed rate has now been relegated to the history books. It’s hard to see a major bank dropping its four-year fixed rate this low for a very long time, if ever.

“While the majority of banks’ three-year fixed rate changes are still cuts, rather than hikes, the tide could turn later this year as the economy continues to recover.

“The cost of funding is likely to increase in coming years, so it’s no surprise lenders are starting to factor this in.

“If you are looking to fix your rate and haven’t done so yet, don’t panic. There are still plenty of competitive fixed rates on the market.

“Take the time to do your research and find a loan that suits your finances. There are still 56 lenders offering 176 home loan rates under two per cent” she said.

Lowest rates on RateCity database

LenderRate
1 yr fixedBCU

1.67%

2 yr fixedHomestar Finance

1.74%

3 yr fixedUBank

1.75%

4 yr fixedBankVic

1.95%

5 yr fixedBank Australia

2.10%

VariableReduce Home Loans

1.77%

Source: RateCity. Data accurate as of 28.04.2021. Rates are for owner occupiers paying principal and interest. Some LVR requirements apply.

Lowest big four bank owner-occupier home loan rates

Lowest variable

(basic loan)

Variable with offset (package)Fixed

2 year

Fixed

3 year

Fixed

4 year

Fixed

5 year

CBA

2.69%

3.85%

1.94%

2.14%

2.19%

2.99%

Westpac

2.19% for 2yrs then 2.69%

3.19%

1.79%

1.88%

2.19%

2.49%

NAB

2.69%

3.62%

1.89%

1.98%

1.98%

2.24%

ANZ

2.72%

2.99%

2.04%

2.04%

2.24%

2.24%

Source: RateCity. Data accurate as of 28.04.2021. Note: Westpac's rates are for a loan to value ratio of up to 70%. NAB variable with offset for loan sizes of $750K+.

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This article was reviewed by Senior Finance Writer Liz Seatter before it was published as part of RateCity's Fact Check process.

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