Westpac hikes interest-only rates

Westpac announced earlier this week that it has increased rates on its interest-only fixed rate loans by up to 30 basis points.

For one, two and three-year fixed rate loans, rates for owner-occupier interest-only loans will increase by 30 basis points to 4.56 per cent.

Investors’ fixed rates on interest-only loans will rise by 10 basis points across one, two, three and five-year loan terms to 4.46, 4.56, 4.56 and 4.86 per cent respectively.

Meanwhile, investors’ principal and interest deals will remain unchanged for one, three and five-year loan terms.

For owner-occupiers with principal and interest repayments on one, three and five-year terms, rates will remain unchanged, while two-year fixed loan rates will drop by 11 basis points to 3.88 per cent. For those on four-year terms, the rate will drop by 20 basis points to 4.39 per cent.

A Westpac spokesperson said that these new rates will only apply to customers who wish to fix their loan from today. It will not impact variable rate home loan customers, or existing fixed rate home loan customers.

The spokesperson added, “In response to recent regulatory changes, we have both decreased and increased some of our fixed rates for customers who wish to fix their home loan.

“We are reducing some of our fixed rates by up to 0.31 per cent for customers who make principal and interest repayments, to encourage customers to pay down their home loan in this low interest rate environment.”

[Related: Major bank lifts fixed interest rates]

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Francesca Krakue

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