Westpac has adjusted its fixed mortgage rates, placing itself in a leading position alongside Macquarie by offering a 5.69% p.a. rate for borrowers with a loan-to-value ratio (LVR) of less than 70%, Mozo reported.
This rate adjustment puts Westpac at the forefront of the fixed-rate market.
Last week’s announcement by NAB marked the first rate reduction among the major banks in 2025, with cuts reaching up to 0.25 percentage points for owner-occupier loans.
Despite these reductions, NAB’s lowest rates remained above 6%.
Here's a comparison of the Big Four's 1-year fixed rates following Westpac's recent reduction:
Westpac announced reductions ranging from 20 to 40 basis points across its one- and two-year fixed home loan rates, with its regional brands – BankSA, Bank of Melbourne, and St. George – seeing cuts of 30 to 40 basis points.
These adjustments include both packaged and non-packaged loans, intensifying competition within the mortgage industry.
See table below for the leading fixed rates by term, according to Mozo.
Peter Marshall (pictured above), a Mozo banking and rates expert, highlighted the significance of Westpac’s rate cut, noting its rarity and potential market impact.
“Westpac’s cut … has propelled it to the top of the one-year fixed rate leaderboard next to Macquarie, which is an unusual move for a Big Four bank,” Marshall said.
He also highlighted the broader implications for the home loan market and potential signals of impending rate cuts by the Reserve Bank (RBA), with all big four banks anticipating a rate cut this February.
Despite the rate reductions by Westpac and NAB, experts, including Mozo’s Peter Terlato, suggested that RBA is likely to maintain the current cash rate in the upcoming decision.
Core inflation remains above the target range, and while economic growth has slowed, it has not reached levels that typically prompt a rate cut. The employment landscape, despite a slight increase in unemployment, continues to show resilience.
Terlato’s analysis indicated that, despite growing speculation, RBA might opt to hold the rate steady in February, awaiting further economic indicators. The ongoing strength in employment and the current inflation rate suggest that immediate rate cuts may not be warranted, pointing to a cautious approach from RBA in the near term.
