RateCity.com.au
powering smart financial decisions
RateCity.com.au

Westpac hikes fixed rates by up to 0.80% – when will they hit 5%?

Westpac hikes fixed rates by up to 0.80% – when will they hit 5%?

Australia’s second largest lender, Westpac, has today hiked fixed rates for owner-occupiers and investors, in some cases by up to 0.80 percentage points.

Its subsidiaries St George, Bank of Melbourne and Bank SA have also hiked rates in all fixed rate categories.

As a result of today’s changes, Westpac no longer offers a fixed rate starting with a ‘2’.

It also now has the highest rates of the big four banks in all categories except the 5-year rate, for owner-occupiers paying principal and interest.

Today’s changes to Westpac’s lowest fixed rates for owner-occupiers paying principal and interest

Rate typeOld rateNew rateDifference
1-yr fixed

2.79%

3.59%

0.80%

2-yr fixed

3.69%

4.29%

0.60%

3-yr fixed

4.19%

4.69%

0.50%

4-yr fixed

4.39%

4.79%

0.40%

5-yr fixed

4.59%

4.89%

0.30%

Source: RateCity.com.au. Rate is for an owner-occupier paying principal and interest with a 70% loan-to-value ratio.

Analysis of the RateCity.com.au database shows:

  • 1.84% is the lowest fixed rate from Unity Bank for 1 year (first home buyers only).
  • 32 lenders are still offering fixed rates under 3 per cent (majority of which are for 1-year).
  • CBA and NAB are the only big banks still offering a fixed rate under 3 per cent.
  • The average big four bank lowest 3-year fixed rate has risen by 2.42 percentage points in the past 12 months.

RateCity.com.au research director, Sally Tindall, said: “Westpac has officially shut the door on fixed rates starting with a ‘2’, hiking its 1-year rate by a huge 0.80 percentage points.”

“Westpac’s hikes are a sign of things to come. Over the next few months we could see a number of the big banks’ longer-term fixed rates climb above the 5 per cent mark, even on their most competitive loans,” she said.

“Westpac now has the highest fixed rates on offer for owner-occupiers paying principal and interest, however, that’s unlikely to last. The big banks love to play leapfrog in the fixed rate space. It’s only a matter of time before one of the others jumps right over them,” she said.

The latest ABS lending indicator data shows fixed rates have continued to fall out of favour. Just 22 per cent of all new loans in March were fixed, down from the peak in July 2021 when 46 per cent of new lending were fixed.

“Anyone still in the market for a fixed rate should do their homework before they lock in. Competitive fixed rates are increasingly hard to find but that makes them all the more valuable,” she said.

Current lowest big four bank rates

Rate typeCBAWestpacNABANZ
1-yr fixed

2.99%

3.59%

2.99%

3.29%

2-yr fixed

3.79%

4.29%

3.99%

3.99%

3-yr fixed

4.19%

4.69%

4.49%

4.39%

4-yr fixed

4.39%

4.79%

4.79%

4.69%

5-yr fixed

4.49%

4.89%

4.99%

4.89%

Lowest variable

2.44%

2.09% for 2 yrs then 2.49%

2.44%

2.29%

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

Screen Shot 2022-05-26 at 1.35.41 pm

Source: ABS lending indicators for March 2022, released 4 May 2022.

Did you find this helpful? Why not share this news?

This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

Advertisement

RateCity

Related news