Westpac cuts home loan rates as highly competitive market continues

Westpac now has the lowest advertised two-year rate among the five major banks. Photo / NZME

Westpac NZ has cut its special and standard fixed home loan rates further.

From Friday, Westpac’s home loan rates from six months to four years will decrease between 4-20 basis points (bps).

Its two-year fixed rate will fall 20bps to 5.79% (special) and 6.39% (standard).

That gives Westpac the lowest advertised two-year rate among the five major banks.

Westpac’s one-year fixed home loan rate drops 14bps to 6.45% (special) and 7.05% (standard).

The bank will also lower its rates for term deposits from between six months and two years. The largest of these will be 10bps.

Sarah Hearn, Westpac NZ general manager of product, sustainability and marketing, said it was a highly competitive market.

“Falling home loan rates are good news for both existing homeowners and those looking to get on the ladder,” she said.

Hearn said the bank’s popular one-year special home loan rate has now fallen by 0.69% over the past two months.

“From our data and conversations with customers, we’re encouraged that most are managing ongoing cost pressures well. However, anyone who’s worried about their finances should get in touch as soon as possible,” Hearn said.

Figures from the Reserve Bank show people with mortgages are bank-switching at a record rate.

The value of mortgages refinanced by a new bank climbed to $1.75 billion in July. This was driven by banks working harder than usual to attract new borrowers as well as particularly large amounts of debt coming up for renewal lately.

On Tuesday, BNZ trimmed its home loan rates yet again.

The bank cut its fixed rates by between 4-20bps, with longer-term rates seeing the biggest fall.

BNZ’s popular 18-month rate was now 5.99%, and the two-year rate was at 5.89%.

In August, the Reserve Bank delivered the first cut to the official cash rate (OCR) since 2020. It also revised its forecast rate track, suggesting the OCR will fall from 5.25% to at least 5% by the end of the year and to at least 4.5% by June next year.