Westpac cuts variable rates on Flexi First Option

Family moving into new home.

Westpac made several changes to its home loans suite today, most notably cutting the discounted variable rate on its Flexi First Option by 20 basis points for both owner occupiers and investors.

Effective today, the Flexi First Option will come with a variable rate of 2.09% p.a. (2.52% p.a. comparison rate*), available to owner occupiers for two years before reverting to 2.59% p.a. (2.52% p.a. comparison rate*).

For owner occupiers with a deposit of at least 30% of a property’s value, the two year discount rate will be an even lower 1.99% p.a. (2.42% p.a. comparison rate*).

“The home loan market is running hot as a Big Four bank enters the territory that was oncetypically reserved for online lenders - a variable rate below 2%,” said Mozo spokesperson Tom Godfrey.

The record cut also puts the Flexi First Option well below the average variable rate for both existing owner occupiers and new borrowers, which RBA data says currently sit at 3.08% p.a. and 2.79% p.a., respectively.

St. George, Bank of Melbourne and BankSA, all part of the Westpac Group, have made similar changes. They have also cut 2-year fixed package rates by 10 basis points to 1.84% p.a. (3.38% p.a. comparison rate*).

At the same time as it lowered variable rates, Westpac also increased 4 and 5-year fixed rates for the same loan options by 30 basis points, continuing a trend we’ve observed for several months now.

As pressure to raise long-term fixed rates mounts, lenders have taken to sharpening variable rates to get as many new customers in their loan books as they possibly can.

The big four banks, however, haven’t been too eager to offer variable rate customers relief. Prior to today’s decision by Westpac, the only other major bank to reduce variable rates for owner occupiers this year was ANZ.

We’ve included a quick overview of the Westpac Flexi First Option below, but to see how it stacks up against other offers on the market, visit our home loan comparison page, where you’ll be able to filter your search by rate and type.

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Important disclosures and comparison rate warning*
Westpac Flexi First Option
  • Discounted 2.09% p.a. variable interest rate for 2 years (2.52% p.a. comparison rate*)
  • No ongoing service fees
  • Extra repayments, redraws and repayment holidays available
Find out more

The Westpac Flexi First Option comes with a standard variable rate of 2.59% p.a. (2.52% p.a. comparison rate*), but for the first two years, owner occupiers can receive a discounted rate of 2.09% p.a. (2.52% p.a. comparison rate*). Fees have been kept to a minimum and borrowers can take advantage of a number of useful features, such as the ability to make free extra repayments, access a redraw facility, split your loan and take a repayment holiday. And if you refinance a loan worth at least $250,000 with an LVR of <90%, you could receive $3,000 cashback. This offer only applies to refinances from outside the Westpac Group.

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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