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Home Loan Handbook
Turbocharge WealthIn the latest development in the competitive landscape of home loans, Westpac has entered the fray by matching ANZ’s low variable rate. This move by Westpac, one of Australia’s major lenders, comes as part of the ongoing mortgage wars aimed at attracting and retaining customers in the highly competitive home loan market.
With the announcement of a low variable rate of 5.84 percent for its Flexi First Option, Westpac has positioned itself to compete directly with ANZ. This rate is specifically targeted at owner-occupiers who are paying principal and interest with a deposit exceeding 30 percent, and applications for this offer can be made online directly through Westpac.
The reduction in the variable rate by Westpac to align with ANZ reflects the intensifying competition among the big four banks. This move signifies a shift towards digital channels as banks strive to entice customers, particularly those who are open to digital application processes. According to Sally Tindall, the data insights director at Canstar, this move by Westpac indicates a resurgence in the refinance market, with banks focusing on attracting customers with substantial deposits who are willing to switch to online platforms.
Among the other major banks, the Commonwealth Bank of Australia (CBA) currently offers a variable rate of 5.90 percent, while NAB stands at 6.19 percent. However, customers looking for even lower rates have the option to explore offerings from over 35 low-cost lenders providing variable rates below 5.75 percent.
The competition in the home loan market is beneficial for consumers, as it presents opportunities to save on interest payments. Data from the Australian Bureau of Statistics (ABS) reveals that over $206 billion worth of home loans were refinanced in 2024, a figure that is expected to rise following the Reserve Bank’s rate cut in February. By switching lenders, customers have the potential to save thousands of dollars in interest charges, although it is advised to assess individual circumstances before making a decision.
Looking ahead, the Reserve Bank is scheduled to convene at the end of March to review the cash rate, shortly after the release of Australia’s federal budget. This period of intense competition and rate adjustments in the home loan market underscores the importance for borrowers to stay informed and consider their options carefully to make the most of the current offerings.
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