Home loan shake-up: Westpac Group slashes rates by at least 1 per cent across major brands

By Peter Terlato · · 3 min read
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Westpac’s logo displayed outside the bank.

The Westpac Group – comprising St.George, Bank of Melbourne, BankSA and Westpac – has lowered advertised rates on package variable home loans for new customers.

These reductions are at least 1 percentage point lower, making them among the most significant in recent times and reflect the banks’ responses to evolving economic conditions.

The cuts span various variable loan packages for new customers, including owner occupier and investor loans, with both principal and interest and interest-only repayment options. A packaged rate refers to a home loan that’s bundled with other financial products (e.g. offset account) from the same lender, typically in return for a discounted interest rate and added perks.

The changes come into effect immediately (16 April, 2025). See below for rate adjustments:

New packaged rates with a loan-to-value ratio (LVR) of 70-80%

Bank Loan type Previous rate New rate
Westpac
 Owner occupier (P&I)
 7.29% p.a.
 6.24% p.a.
Owner occupier (IO)
 7.88% p.a.
 6.83% p.a.
Investor (P&I)
 7.84% p.a.
 6.44% p.a.
Investor (IO)
 8.10% p.a.
 6.70% p.a.
St.George Bank
 Owner occupier (P&I)
 7.24% p.a.
 6.24% p.a.
Owner occupier (IO)
 7.83% p.a.
 6.83% p.a.
Investor (P&I)
 7.80% p.a.
 6.44% p.a.
Investor (IO)
 8.09% p.a.
 6.73% p.a.
Bank of Melbourne
 Owner occupier (P&I)
 7.24% p.a.
 6.24% p.a.
Owner occupier (IO)
 7.83% p.a.
 6.83% p.a.
Investor (P&I)
 7.82% p.a.
 6.44% p.a.
Investor (IO)
 8.11% p.a.
 6.73% p.a.
BankSA
 Owner occupier (P&I)
 7.24% p.a.
 6.24% p.a.
Owner occupier (IO)
 7.83% p.a.
 6.83% p.a.
Investor (P&I)
 7.81% p.a.
 6.44% p.a.
Investor (IO)
 8.10% p.a.
 6.73% p.a.

It’s important to note that the above interest rates do not include any LVR discounts or margins.

Anticipation builds ahead of RBA’s May rate decision

As the Reserve Bank of Australia’s (RBA) next meeting approaches on 20 May, 2025, market expectations are leaning towards a significant rate cut. The cash rate currently stands at 4.10%, but recent economic indicators and global developments have led to predictions of a reduction.​

National Australia Bank (NAB) recently revised its forecast, now anticipating a 50 basis point cut in May, bringing the cash rate down to 3.60%. NAB’s chief economist, Sally Auld, cited intensified global headwinds and a restrictive real cash rate as reasons for this adjustment. She emphasised the need for the RBA to "play catch up" to support economic activity.

Other major banks have also updated their projections. The Commonwealth Bank expects a 25 basis point cut in May, while ANZ has indicated that a larger cut is possible if global economic conditions deteriorate further.

RBA Governor Michele Bullock has acknowledged the uncertainties stemming from recent global trade tensions, particularly the U.S. imposing new tariffs and China’s retaliatory measures. While highlighting the resilience of Australia’s financial system, she noted that it’s too early to determine the exact path of interest rates amid these uncertainties.

Why your LVR is the secret to getting a lower rate

Next steps for borrowers

If your home loan rate is still sitting above 7 per cent, it might be time to investigate the cost of refinancing. The difference between 7.84% p.a. and 6.44% p.a. on a $500,000 loan could mean more than $400 in savings each month (not including fees and other charges).

With the RBA’s May decision just weeks away and more lenders potentially following suit, homeowners should stay alert to further movements. If you haven’t reviewed your mortgage in over a year, now’s the perfect time to compare your options and negotiate a better deal.

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Last updated 5 December 2025 Important disclosures and comparison rate warning*
What are your home loan needs?
Loan purpose
Buying or Refinancing
  • Promoted

    Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.19 % p.a.
    Variable
    Comparison rate
    5.10 % p.a.
    Initial monthly repayment
    $2,742
    Go to site
    • The first home loan with an automatic loyalty discount (conditions apply)
    • No application or banking fees
    • Built by CommBank

  • Fixed Rate Home Loan

    • Fixed rate
    • Owner occupier
    • Principal & Interest
    • 5% min deposit
    Interest rate
    5.09 % p.a.
    Fixed 2 years
    Comparison rate
    5.43 % p.a.
    Initial monthly repayment
    $2,712
    Go to site
    • No ongoing annual fees
    • Make up to $25,000 extra repayments during a fixed period, fee free (T&Cs apply)
    • Lock in for up to 5 years.

  • Unloan Variable Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    Interest rate
    5.19 % p.a.
    Variable
    Comparison rate
    5.10 % p.a.
    Initial monthly repayment
    $2,742
    Go to site
    • The first home loan with an automatic loyalty discount (conditions apply)
    • No application or banking fees
    • Built by CommBank

  • Discount Great Rate Home Loan

    • Owner occupier
    • Principal & Interest
    • 20% min deposit
    • Redraw available
    • Cashback
    Interest rate
    5.19 % p.a.
    Variable
    Comparison rate
    5.20 % p.a.
    Initial monthly repayment
    $2,742
    Go to site
    • Get up to $3,000 cashback when you apply online (T&Cs apply)
    • No paperwork or payslips required (see site for details)
    • Low variable rate

  • Variable Home Loan 90

    • Owner occupier
    • Principal & Interest
    • 10% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.29 % p.a.
    Variable
    Comparison rate
    5.33 % p.a.
    Initial monthly repayment
    $2,773
    Go to site
    • No monthly or ongoing fees
    • Option to add an offset for 0.10% p.a.

  • Offset Home Loan

    • Owner occupier
    • Principal & Interest
    • 40% min deposit
    • Offset available
    • Redraw available
    Interest rate
    5.39 % p.a.
    Variable
    Comparison rate
    5.42 % p.a.
    Initial monthly repayment
    $2,805
    Go to site
    • No ongoing monthly loan maintenance fees to pay.
    • Pre-approval valid for 3 months
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* 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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