One of Australia’s four big banks is making changes to its interest rates

One of Australia’s four major banks has made some surprising changes to its interest rates for homeowners.

One of Australia’s big four banks is making big changes to its interest rates for homeowners.

Westpac Bank is decreasing its interest rates for Australians looking to buy into the bank’s Flexi First variable home loans.

The big bank will be now offering a discount of 0.15 per cent p.a. that will apply to the ‘two year introductory’ period and “life of loan” promotional rate after the first two years.

Principal and interest repayments for those with a Flexi First Owner Occupied Home Loan or a Flexi First Investment Loan, and interest-only repayments for those with a Flexi First Investment Loan will be affected by the changes.

Westpac is making changes to its Flexi First home loans. Picture: John Gass

The changes are only available for new applications received from August 18.

Craig McDonald, owner of CBM Mortgages, in Sydney’s eastern suburbs, said many lenders were changing their offerings to try and pick up new customers.

“We are seeing many lenders introducing new products as well as re-evaluating their variable rate loans,” he said.

“They are trying to pick up new clients and they will know some clients will have fixed rates expiring soon.

“With the large gap between current fixed rates and variable, clients are shopping around for a competitive variable rate rather than going fixed.”

Earlier this month, Westpac chose to spare some customers from escalating price hike pain as the Reserve Bank of Australia confirmed its fourth rate rise, boosting the official cash rate by 0.50 per cent per annum.

Extending a life line to customers with a four-year owner occupied home loan, the bank decreased the fixed interest rate by one per cent, down to 4.99.

The Commonwealth Bank was the first big bank to announce rate changes earlier this month. Picture: Emma Brasier.

The interest rate change will also come into effect on Thursday, but the adjustment will apply to both new and existing home loan variable rate products.

Westpac was the third of the big banks to announce its rate changes at the beginning of August, unsurprisingly following its rivals the Commonwealth Bank and ANZ in increasing its variable home loan interest rates.

The big bank’s up-scaled mortgage rates came into effect for both new and existing customers on August 12.

Originally published as One of Australia’s four big banks is making changes to its interest rates