Westpac slashes four and five-year mortgage rates to new market low
Westpac has slashed its four- and five-year home loan rates to 5.99%, the lowest rate in more than a decade.
The new rate is effective today and is for a limited time – an attempt to encourage customers to lock in their mortgages on fixed terms in the competitive mortgage market.
Until now, the interest rate battles between the banks have focused on shorter-term rates of fixed rate terms of two years or less.
Westpac says all its fixed-term mortgage rates are now below 6%.
The four-year rate has been reduced 21 basis points from 6.20% to 5.99% and the five-year rate has fallen 61 basis points from 6.60% to 5.99%.
Among the major banks, the closest match to Westpac’s four-year fixed rate is TSB and ASB, offering 6.1%. All the other major banks are offering 6.2%.
Westpac’s floating rate remains 5.6%.
The official cash rate, which influences the rates banks set for mortgages, is widely expected by economists to remain at 2.5% until the end of next year at least.
Data in the Reserve Bank’s latest monetary policy statement reveals there has been a dramatic shift away towards floating rates since the end of 2008.
And the shift has accelerated again in the last few months.
The proportion of mortgages on floating rates peaked in April at 63.1% of all mortgages and has fallen away to 58.7% currently.