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Westpac follows CBA and hikes fixed rates

Westpac follows CBA and hikes fixed rates

Westpac has today followed CBA’s lead and hiked fixed home loan rates.

Westpac has increased its 2-, 3-, 4- and 5-year fixed rates by 0.10 per cent for owner-occupiers paying principal and interest.

Last Friday CBA hiked its 2-, 3- and 4-year fixed rates for owner-occupiers by 0.10 per cent and ING raised its fixed rates by 0.05 to 0.20 per cent. 

Westpac home loan rate changes

 Loan

Old rate 

New rate 

Change 

2-year fixed  1.89% 1.99% 0.10% 
3-year fixed 1.98% 2.08% 0.10% 
4-year fixed 2.49% 2.59% 0.10% 
5-year fixed 2.79% 2.89% 0.10%

Note: Above rates are for owner-occupiers paying principal and interest on a package rate with an annual fee of $395 for a loan to value ratio of 70% or less.

Rate changes in the last month: lenders that have moved at least one rate

Lenders that have cut 

Lenders that have hiked 

1-year fixed 8
2-year fixed 7
3-year fixed217
4-year fixed012
5-year fixed011
Variable272

Source: RateCity.com.au. Data is from 20 September to 19 October 2021 inclusive. 

RateCity.com.au research director, Sally Tindall, said: “Westpac has followed big four bank rival CBA in hiking fixed rates.”

“These fixed rate hikes suggest the days of ultra-cheap funding could be numbered,” she said.

“While the RBA is insistent the next cash rate hike won’t be until at least 2024, the banks are anticipating an increase to the cost of funding once borders reopen and the economy rebounds.

“While today’s fixed rate hikes from Westpac are relatively small, people in the queue for a home loan who didn’t lock in their rate will understandably be annoyed.

“Westpac has kept its 1- and 2-year fixed rates under 2 per cent for owner-occupiers paying principal and interest in order to stay competitive in a market where refinancing is at record highs.

“While the writing might be on the wall for fixed rates, the party isn’t over yet – there are still 154 fixed rates under 2 per cent,” she said.

Lowest big four bank owner-occupier home loan rates

CBA

Westpac*

NAB 

ANZ

1-year fixed1.99% 1.99% 2.09% 2.04% 
2-year fixed 2.09% 1.99% 1.99% 1.94% 
3-year fixed 2.29% 2.08%` 2.18% 2.04% 
4-year fixed 2.39% 2.59% 2.49% 2.49%
5-year fixed2.99%2.89%2.79%2.69%
Variable2.29%1.99% for 2 yrs then 2.49%2.69%2.72%

Source: RateCity.com.au. *Note: CBA and Westpac rates are for a loan to value ratio of up to 70%.

Lowest rates on the RateCity.com.au database

Lender Advertised rate 
1-year fixed Greater Bank, Bank of us 1.59% 
2-year fixed Greater Bank 1.59%
3-year fixedCommunity First Credit Union1.79%
4-year fixedFreedom Lend2.27%
5-year fixedFreedom Lend2.27%
VariableReduce Home Loans1.77%

Source: RateCity.com.au Note: Rates are for owner-occupiers paying principal and interest. Some LVR and location requirements apply. 

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This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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