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Westpac variable rate home loan products:
Westpac variable home loan rates FAQs
Why choose a variable rate home loan?
A variable rate home loan offers flexibility and potential savings. It allows you to take advantage of interest rate decreases, make extra repayments, and access redraw facilities.
What is Westpac variable home loan rate?
A Westpac variable home loan rate is an interest rate that can fluctuate over time. It offers flexible options for both owner-occupiers and investors.
With a variable rate, you can benefit from potential decreases in interest rates, which means lower repayments. If rates increase, your repayments will also rise.
Difference between variable and fixed rates
Fixed rates do not change for a set period, providing certainty about your repayments. Variable rates, on the other hand, can change with the market. This means:
- certainty with fixed rates: your interest rate and repayments remain stable
- flexibility with variable rates: potential to save if rates drop
- risk with variable rates: repayments can increase if rates rise
Switching from fixed to variable
If you are in a fixed mortgage but want to apply for a variable rate instead, Westpac allows you to switch all or part of your loan balance. This switch may incur break costs if done before the fixed rate term ends. However, moving from Westpac variable home loan rates to a fixed one typically avoids break costs, though other fees might apply.
Key benefits of Westpac variable home loan rates
- extra repayments: make additional repayments without any cap
- offset account: use an offset facility to reduce the interest you pay
- redraw facility: access extra cash through redraws on additional repayments
- combination options: mix fixed and variable rates for a balanced approach
Choosing the right loan depends on your financial situation and future plans. Assess your needs and consider consulting a mortgage broker for personalised advice.
Is Westpac increasing interest rates?
Westpac will adjust its rates if the Reserve Bank of Australia changes the cash rate, which some experts think might happen mid-2025. However, in November 2023, Westpac did adjust its interest rates following the RBA’s cash rate hike.
Westpac variable home loan rates increase
On 8 November 2023, the RBA increased the cash rate. Following this, Westpac announced a 0.25% p.a. increase to variable home loan interest rates which came into effect on 21 November 2023. This change impacted new and existing home loans.
What this meant for Westpac customers
For Principal & Interest variable rate home loans
- adjusting repayments: you could call Westpac to adjust repayments after the rate change
- direct debits: automatic updates ensured new minimum repayments were met
- review in early 2024: Westpac reviewed repayments and informed customers of any changes
For Interest-Only variable rate home loans
- monthly repayment changes: repayments adjusted monthly based on the interest charged
- direct debits: continued automatic updates to meet Interest-Only repayments
For Fixed interest rate home loans
Repayments were unaffected by variable rate changes during the fixed rate term.
Preparing for future rate changes
To manage possible rate hikes in the future, consider the following steps:
- calculate repayments: use a rate change calculator or repayment tool to predict future payment amounts
- revise your budget: find ways to reduce expenses and apply the savings to your mortgage
- create a financial cushion: make additional payments or use an offset account to lower your interest
- modify payment schedule: change to fortnightly or weekly payments to shorten your loan term and decrease interest expenses
Westpac variable home loan rates can fluctuate based on RBA decisions. Understanding past rate changes and preparing for future adjustments can help you manage your mortgage effectively. Consider consulting a mortgage broker for tailored advice.
How is home loan interest calculated by Westpac?
Westpac calculates home loan interest daily and charges it monthly. The remaining balance is multiplied by the interest rate and divided by 365 days.
Daily interest calculation
Westpac variable home loan rates are calculated based on your daily balance, charging it monthly. Each day, the remaining balance is multiplied by the interest rate and divided by 365. This daily interest is then summed up and charged monthly.
Interest calculation details
- monthly charge: accumulated daily interest is charged on the repayment due date
- interest only loans: only the interest is paid monthly; the principal remains the same
Using the Westpac variable home loan rates calculator
The Westpac variable home loan rates online calculator helps estimate repayments:
- compare repayment types: evaluate Principal & Interest vs. Interest Only repayments
- interest rate effects: assess how fixed or variable rates impact your loan
- repayment frequency: see the effects of weekly, fortnightly, or monthly payments
- extra repayments: understand the benefits of additional payments
Westpac's interest calculation method provides clarity and helps you plan repayments. Use their tools to manage your loan effectively.
How to apply for a Westpac home loan
To apply for a Westpac home loan, start by estimating your loan repayments and deposit. Complete the application online or book an appointment with a Westpac lender.
Eligibility criteria
To be eligible for a Westpac home loan, you must:
- be an Australian citizen or permanent resident
- be employed or self-employed
- be at least 18 years old
Preparing your application
When applying, Westpac will require details about:
- income and assets: information about your earnings and what you own
- expenses and debts: your monthly expenses and any existing loans
- dependants: information about any dependants you support
Required documents
After submitting your application, you'll need to upload:
- bank statements: recent statements for all your accounts
- proof of income: payslips or tax returns, especially if self-employed
- property details: information about the property you're buying
- identification: two forms of ID if you're a new customer (e.g., driver’s licence, Medicare card, passport)
Conditional approval
Westpac offers conditional approval, which lasts 90 days and can be extended if your financial circumstances remain unchanged. This pre-approval helps you confidently make offers on properties.
Applying for Westpac variable home loan rates involves meeting eligibility criteria, preparing necessary documents, and possibly securing conditional approval. Use Westpac's resources and tools to streamline the process and ensure a smooth application experience.
