Fixed rate bonanza: Major lenders slashing home loan interest rates

The cascade of fixed rate cuts continued this week, with big four bank Westpac joining the torrent of lenders making similar moves in recent times.

The bank behind Australia's second-largest home loan lending book took a knife to its fixed products, slashing rates by as much as 80 basis points and to as low as 5.89% p.a.

This move propels Westpac to the podium, now offering the lowest advertised home loan interest rate among the big four banks, dethroning NAB after its late-July cuts.

However, Australia's fifth-largest bank, Macquarie Bank, still takes the cake, recently slashing rates on some products to as low as 5.79% p.a.

As I detailed on Wednesday, banks and lenders typically adjust fixed interest rates when they expect the interest rate environment - cough the cash rate cough - to change.

Whether that will be the case is still anyone's guess, but economists at the big four banks suggest a downward cash rate movement could come some time before November and May 2025.

Chances are, once the cash rate plunges, a tsunami of variable rate cuts will follow.

Until then, let's dive into all that's been swirling on with the home loan market this week.

Westpac cuts fixed interest rates by up to 80 basis points

Banking giant Westpac headlined the rate-cutting action this week, slashing rates for borrowers looking to fix their rate for between one and five years.

However, it's easy to be confused about the actual rates Westpac advertises.

The bank offers two options for fixed rate borrowers: a standard fixed rate and a packaged fixed rate.

The packaged option promises a 20 basis point interest rate discount, along with other benefits, but comes at an extra cost of $395 per annum.

Borrowers who are new to the bank and have a loan-to-value ratio (LVR) of 70% or less could also receive an additional 10 basis point discount.

This means owner-occupiers with deposits or equity of 30% or more who choose Westpac's fixed rate and opt for the home loan package could now secure the following rates:

Fixed Rate Period	LVR	Change	New rate (p.a.)	Comparison rate (p.a.)*
One year	≤70%	-50bp	6.09%	7.62%
Two years	≤70%	-60bp	5.89%	7.45%
Three years	≤70%	-70bp	5.89%	7.32%
Four years	≤70%	-70bp	5.89%	7.19%
Five years	≤70%	-80bp	5.89%	7.08%

ME Bank lowers fixed interest rates by up to 65 basis points

ME Bank followed in the footsteps of its parent, Bank of Queensland, this week, dropping rates on some of its fixed rate lineup to as low as 5.94% p.a.

Those now available to owner-occupiers include:

Fixed Rate Period	LVR	Change	New rate (p.a.)	Comparison rate (p.a.)
One year	≤80%	-25bp	6.49%	8.43%
Two years	≤80%	-40bp	5.99%	8.11%
Three years	≤80%	-35bp	5.94%	7.86%
Four years	≤80%	-20bp	6.29%	7.77%
Five years	≤80%	-30bp	6.29%	7.60%

Like Westpac, ME Bank also offers a home loan package that provides borrowers with a lower rate of interest for an annual fee - the fee for ME Bank's Member Package is $395 a year.

Great Southern Bank slashes fixed rates by up to 60 basis points

Customer-owned Great Southern Bank also joined in on the cutting action this week, slashing its fixed rates for both owner-occupiers and investors.

Those making principal and interest repayments might rejoice to hear of these changes:

Fixed Rate Period	Change	New rate (p.a.)	Comparison rate (p.a.)
One year Owner-occupier	-20bp	6.49%	7.90%
Two years Owner-occupier	-40bp	6.14%	7.68%
Three years Owner-occupier	-50bp	5.99%	7.47%
Five years Owner-occupier	-60bp	6.09%	7.20%
One year Investor	-20bp	6.59%	8.29%
Two years Investor	-40bp	6.24%	8.03%
Three years Investor	-50bp	6.09%	7.79%
Five years Investor	-60bp	6.19%	7.48%

Newcastle Permanent & Greater Bank drop variable rates 

Finally, there appears to have been two variable home loan rate change this week, introduced by Newcastle Permanent and Greater Bank. And they could be worth sitting up for.

The two banks merged in 2023, and while they continue to operate under their respective brands, they tend to move in tandem.

Here are some of the changes made to their low-rate product lineups this week for those borrowing $150,000 or more and making principal and interest repayments:

Bank	Product	LVR	Change	New rate (p.a.)	Comparison rate (p.a.)*
Newcastle Permanent	Real Deal for owner-occupiers	≤80%	-5bp	6.04%	6.08%
Newcastle Permanent	Real Deal for investors	≤80%	-5bp	6.24%	6.28%
Greater Bank	Great Rate for owner-occupiers	≤80%	-5bp	5.99%	6.00%
Greater Bank	Great Rate for investors	≤80%	-5bp	6.24%	6.25%

The Real Deal and Great Rate products weren’t the only offerings from these banks to see cuts this week.

Variable rates on Newcastle Permanent’s Premium Plus Package and one-year fixed rates dropped by as much as 30 basis points, while Greater Bank also cut advertised rates on its Ultimate Home Loan product.

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