Westpac group hikes 2-and 3-year fixed home loan rates

Australia’s second largest bank, Westpac, and its subsidiaries St George, Bank of Melbourne and BankSA, have hiked their 2- and 3-year fixed rates for owner-occupiers paying principal and interest by 0.10 per cent.

CBA lifted its 3-year rate last month (21 May). Since then 9 lenders have followed suit with hikes to 3-year rates including ING, AMP and today, the Westpac group.

Westpac has also hiked its 2-year rate from the bank’s record low rate of 1.79 per cent. There were no changes to investor rates.

Westpac fixed rate changes

Note: the above rates are for owner-occupiers paying principal and interest on a package home loan with a loan-to-value ratio of 70% or less.

St George, Bank of Melbourne fixed rate changes – please contact us for BankSA changes

Note: the above rates are for owner-occupiers paying principal and interest on a package home loan with a loan-to-value ratio of 60% or less.

RateCity.com.au database analysis: fixed rate changes in the last month

Source: RateCity.com.au. Note some lenders have hiked and cut multiple home loans rates.

RateCity.com.au research director, Sally Tindall, said: “Three-year fixed rates are on the rise as the banks start to factor in an expected increase to the cost of funding.”

“The RBA’s term funding facility, which has been offering the banks money at just 0.10 per cent fixed for three years, is wrapping up in three weeks. We expect more banks to hike as a result,” she said.

“Westpac’s hikes to its three-year rate come as no surprise. CBA raised its rate last month – it was only a matter of time before other banks followed suit,” she said.

“The two-year rate hikes have come earlier than expected, but they were coming off a near-record low. The bank would have been squeezing its profit margin to offer those rates.

“Even with a 0.10 per cent hike, Westpac and St George are still offering very competitive rates, particularly for people with decent deposits.

“While Melbourne businesses are facing yet another setback, by and large Australia’s economic recovery is on track. The hikes to fixed rates are symptomatic of this.

“The fixed rate market is set to look completely different by this time next year. Right now, there are still 176 home loan rates under 2 per cent but by mid-2022, there could be none,” she said.

Lowest big four bank owner-occupier home loan rates

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

Lowest rates on the RateCity.com.au database

Note: Rates are for owner-occupiers paying principal and interest. Some LVR requirements apply. 

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