Key Facts

  • Westpac has reduced all its two year and longer fixed rate home loans while slightly increasing shorter rates.
  • Westpac now offers the lowest rates of any main bank for terms two years and longer.
  • The rate reduction follows recent reductions in wholesale rate indicators.
  • These changes happened four weeks after the bank increased home loan rates.
  • Westpac has extended its 6.10% eighteen month term deposit offer to a 12 month term.

Article Summary

Westpac, one of the main banks in New Zealand, has recently made changes to its home loan rates. These revisions might indicate that the home loan interest rates might be headed for a shift. For all term lengths of two years or more, Westpac has cut its rates. Although this reduction has been offset by a slight increase in shorter rates, Westpac now boasts the lowest rates of any main bank for these longer-term loans.

The bank has attributed these changes to the falling cost of wholesale funding, which aligns with the recent reductions in wholesale rate indicators. Notwithstanding the above, the bank paradoxically made these changes when wholesale swap rates noted a noticeable rise.

Moreover, Westpac has also extended its 18-month term deposit offer, with an interest rate of 6.10%, to a 12-month duration. This prolongation of the term deposit scheme comes as rival bank BNZ is set to end its one-year term deposit offer, which sports a 6.25% interest rate, at the end of this week. Despite these changes, it should be mentioned that the bank did not modify any other term deposit on that day.

These changes by Westpac have come only four weeks after the bank raised its home loan rates. During this period, the frequency of rate changes across all banks in the home loan sector has been relatively low. This suggests that potential homebuyers should carefully assess their options and negotiate their rates.

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