Westpac makes its fourth home loan rate cut since the start of July in a bid to claim the 'lowest rate card'

With spring now just weeks away, and a central bank that has cut interest rates (and financial markets suggesting more are coming), banks have been active and very competitive in pushing through multiple rate cuts to their advertised rate cards.

First to break from the pack was ASB who dumped a broad market-leading rate card into a currently-moribund real estate market following the OCR cut.

And now Westpac has made more adjustments to its rate card to stay in the game.

Main-bank competition is fierce at present.

And you can see why in the latest bank result releases. ASB loan growth was less than +1% in value in year to June 2024. They said their market share fell from 21.5% in the June 2023 year to 20.9% by June 2024 (page 61).

No bank wants to be reporting lackluster loan growth to their Aussie masters. Without overall market growth, the only other option is to try and take market share from your rivals.

Westpac's approach is to match ASB with market leading rates, and go lower for their four and five year rate offers.

Westpac's five year fixed rate has been dropped by -30 bps to 5.69%, the lowest rate in their whole card.

One consequence is that Westpac has also cut all its term deposit rate offers for terms of 8 months or longer. Savers will have to await a pickup in lending demand before this lock-step is broken. That will be because banks will need the funding.

Almost all banks will have some flexibility in their rate offers. So the carded rates are just the start. Negotiate. How flexible they may be will depend on the strength of your financials. And don't forget, banks have savvy tools at hand to 'know' the likely valuation of your property, so if the loan-to-value ratio (LVR) is near 80% you may not find them very accommodating for a lower rate. With falling house prices, the point where low equity premiums start applying is shifting around as well. See this.

And the carded rates we report here can be different to the rates banks might offer in their banking app. We would like readers to reveal what their banking app shows as the potential offer rates. Please add that market intelligence in the comment section below.

A quick check of the wholesale swap rate chart below gives a clear understanding of where funding costs are heading.

One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is below. Term deposit rates can be assessed using this calculator.

And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. Break fees will be minimal in a rising market. But they become important in a falling market.

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at August 19, 2024	%	%	%	%	%	%	%
ANZ	6.99	6.85	6.49	6.34	5.99	6.84	6.84
from Aug 20	6.89	6.59	6.15	5.99	5.89	5.89	5.89
	6.99	6.85	6.49	6.34	5.99	5.99	5.99
	6.99	6.75		6.34	6.09	6.09	6.09
	6.89 -0.10	6.59 -0.26	6.15 -0.34	5.99 -0.20	5.89 -0.10	5.79 -0.20	5.69 -0.30
Bank of China	6.95	6.79	6.59	6.39	6.09	6.09	6.09
China Construction Bank	6.99	6.85	6.49	6.34	5.99	6.40	6.40
Co-operative Bank	6.99	6.79	6.49	6.29	5.99	6.09	6.09
Heartland Bank		6.69	6.49	6.35	6.15
ICBC	7.05	6.85	6.65	6.49	6.39	6.29	6.29
	6.99	6.85	6.49	5.99	5.99	5.99	5.99
	6.99	6.69	6.65	6.25	5.99	5.99	5.99