Westpac is moving aggressively to boost its mortgage business
Westpac is moving aggressively to boost its mortgage business, slashing the standard variable rate for some products to below 2%.
However, Westpac has also hiked the price on some fixed-rate loans, according to The Australian.
The rate moves are the bank’s latest effort to prop up its troubled mortgage business. Westpac has been losing market share in the mortgage space thanks to loan processing problems offshore. With COVID-19 restrictions causing hefty processing delays offshore, Westpac announced last July that it would move 1,000 jobs back to Australia.
The measures appear to be helping; in a third-quarter update last week, Westpac said growth in its home lending business now aligned with the average for the wider banking system, The Australian reported.
Under the new rate changes, the introductory variable rate will be slashed 20 basis points to 1.99% for loans with a 70% loan-to-valuation ratio, or a deposit of 30%. The offer is for two years only, but it’s reportedly the first time that one of the big four banks has cut its variable rate to below 2%.
However, Westpac will hike four- and five-year fixed rates by 30 basis points, The Australian reported. Further changes will be announced by Westpac’s other brands, including St George Bank/Bank of Melbourne and Bank SA.
Two-year fixed rates will be slashed 21 basis points, with St George/Bank of Melbourne to have the lowest two-year rate at 1.79%, The Australian reported. Four- and five-year fixed rates will increase by 30 basis points, while the basis variable rate will drop by 20 basis points.
The new rate for loans with a 60% LTV will be 2.24%, The Australian reported.
