Westpac slashes fixed rates to 4.89 per cent in first sub-5 per cent major bank offer
Westpac has taken a “chainsaw” to its fixed interest rates, becoming the first major bank to offer customers a rate below 5 per cent.
The big four bank has dropped its two-year fixed interest rate by 70 basis points to 4.89 per cent.
For mortgage holders looking to lock in rates for one year, Westpac has dropped it by 50 basis points to 5.19 per cent.
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Fixed rates over three years are down 60 basis points to 5.29 per cent, while both four and five-year fixed rates are 5.59 per cent.
The rate cuts will also expand to the rest of Westpac group, with St George, Bank of Melbourne and Bank of SA also announcing fixed rate cuts.
Canstar data insights director Sally Tindall described Friday’s reduction as “Westpac has taken a chainsaw to its fixed rate”.
“It’s a decisive move from the big four bank, with Friday’s cuts meaning Westpac now has the lowest fixed rate out of the majors,” she said.
“This is also the first time in the current cutting cycle that a big bank has dropped a fixed rate below the 5 per cent benchmark.”
Canstar says there are 27 other lenders offering fixed interest rates below 5 per cent.
The lowest fixed rate on the market is 4.69 per cent.
Lenders are reducing fixed interest rates as the Reserve Bank of Australia continues to move on the official cash rate.
In August, the central bank cut interest rates for the third time in six months by 25 basis points, with the cash rate down 75 basis points compared with the start of the year.
All four major banks have passed on the full 75 basis point reduction from interest rate cuts in February, May and August.
Interest rate cuts from the RBA exclusively impact variable interest rates and do not directly impact those on a fixed interest rate.
Ms Tindall said whether borrowers locked in a fixed or variable rate largely depended on future RBA moves.
“The maths between the lowest fixed and variable rates is tight and ultimately depends on the future of the cash rate,” she said.
Originally published as Westpac slashes fixed rates to 4.89 per cent in first sub-5 per cent major bank offer
