Westpac reduces one-year mortgage rate 'special' by 16 basis points to 3.99%

ID 20614531 © Wayne Ruston | Dreamstime.com

Westpac is cutting its carded, or advertised, one-year mortgage rate "special" by 16 basis points to 3.99% from 4.15%.

The change is effective Friday, January 18 with the bank saying the offer will run until Friday, February 1.

The 3.99% rate is the equal lowest advertised one-year rate from a bank alongside HSBC's "Premier" rate.

Borrowers require a minimum of 20% equity and a transactional account with Westpac where their salary is paid. Westpac says loans for business and investment purposes and package customers are excluded.

Westpac's move is the second mortgage rate cut by a bank so far in 2019. It follows Kiwibank's 10 basis points cut to its two-year rate, which is now 4.19%.

See all banks' carded, or advertised, home loan interest rates here.

Here is the full snapshot of the advertised fixed-term rates on offer from the key retail banks.

below 80% LVR 6 mths  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
as at January 14, 2019 % % % % % % %
               
ANZ 4.99 4.05 4.19 4.29 4.49 5.55 5.69
ASB 4.95 4.05 4.19 4.29 4.49 4.95 5.09
4.99 4.10 4.79 4.29 4.49 5.19 5.39
Kiwibank 4.99 4.05   4.19 4.49 4.99 5.09
Westpac 4.99 3.99 4.09 4.29 4.59 5.29 5.49
               
4.10 4.10 4.29 4.35 4.49 4.99 5.19
HSBC 4.85 3.99 3.99 4.19 4.69 4.99 5.29
HSBC 4.99 4.15 4.49 4.29 4.49 4.99 5.09
4.85 4.05 4.19 4.25 4.49 4.95 4.99

In addition to the above table, BNZ has a fixed seven year rate of 5.95%. TSB no longer has a ten year offer.

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25 Comments

It almost reminds me of the $1 loaves of bread where there is a max of 5 loaves per customer.

From Aussie earlier:

"The latest data from our surveys indicates that around 40% of loan applications for mortgages were rejected in December 2018, compared with 8% a year prior"

It doesn't matter what the rate is if loan origination has dried up!

DFA? The only commentator that actually provides meaningful analysis imo.

Good point bw, and that is why house prices are falling in AUSTRALIA

There is also a problem with refinancing existing mortgages. Forced sales don't make house prices go up.

Excellent timing ....

The gap between 1 year fixed and floating looks historically high in the charts above. Any idea why?

1 Year Fixed is the new floating. They just haven't got around to changing the labels!

1 year fixed is to lure you in so once you've joined team Westpac it is too much hassle to change banks.

High floating rate punishes those borrowers who don't commit.

Actually, I think you are wrong. It is not hard anymore to change banks; in fact every bank has a system in place that makes it remarkably easy to switch to them, and because they all have it, the barriers to switching have never been lower.

The other point is, it is very easy to maintain multiple bank relationships.

The 'hard-to-swtch' narrative is one from at least a decade ago.

I changed banks last year and it is still a pain. They bond you for 3 years with the cashback and require you to move all your accounts to them. Cost $2,000 in lawyers to move 3 properties.

Don't know what this new system you are referring to is but Westpac never offered it to me.

There is the Break penalty to consider during a fixed rate period?

These miserly bankers were able to offer 3.95% for one year fixed in November when swaps were a lot higher than they are now - they should be offering 3.75% based on current record low swap rates. 3.95% ain't gonna stimulate the record low level of real estate sales volume seen in December - they might need to get it down to 3.25%.

3.25%? By year end you think? Yum yum!

with term deposit rates in the mid 3's and additional capital requirements on the horizon, can't see that happening

wait, what? The estateagent wants banks to help recover low real estate volumes? What abut REAs stopping their price gouging on commissions?

Didn’t you hear, volumes are down 24% in Auckland. We’re going to need a lot less of them going forward.

Haven't really seen any correlation between swap rates and mortgage rates .
glad I didnt fix last month when I rolled over , but how long it will tale me to make up a month on floating, I don't know .

Gotta keep that credit bubble going. If people stop buying as house prices stall and fall, watch out.

Yawn...
“Advertised rate”. Make a call and shop around you’ll be surprised to find this advertised rate is too high.
Banks are fighting for exsisting (good) customers, whoever offers the best rate will win business.

I don't think so Small Kev, do you have an example of actual borrowing ? What rates for what term with which bank please ? I'd be very interested to know

Not at the moment . I can usually get .25 or so off just by asking , ( it goes higher up than the person answering the phone , and an answer the next day ), but in the last few months , its been the advertised and no less , at least on the 1 year. You can definitely get some off the terms that are not on special , I have got 6 month s at .1 % more than the 1year raterecently.

Mortgage rates will only stay the same or go lower. Banks offering 3.95% and giving depositors 2-3% so their margin is still good on volume of sales.

"Banks offering 3.95% and giving depositors 2-3% so their margin is still good on volume of sales."

12 month term deposits for the major banks are all 3.4%-3.55% for >$10k, those gross margins are a bit thinner than you think.

: )