The first bank rate cut

Westpac is the first bank to cut home loan rates, lowering its two-year rate.

It has cut its two and three year rates by 10 basis points and its four year rate by six points; while also increasing short term fixed rates.

It now has the lowest advertised special home loan rates of the five major banks on all terms from two to five years, according to TMM (see rates table here sorted from lowest to highest two year rate).

Westpac has not made changes to its standard rates.

It’s lifting its one-year special rate has gone up by four basis points to 7.39%, and its one-year rate by 4 points.

Westpac general manager of product, sustainability and marketing Sarah Hearn says the changes reflect the bank’s varying costs of funding, with falling wholesale rates over the past month balanced out by strong competition for deposits.

“We’re working hard to support borrowers and savers, and we believe we offer good value on a range of home loan terms, including those who want to lock in longer-term certainty,” she says.

“Our own data continues to show most customers are well-placed to manage the cost of living, which is encouraging.

“However, we know that some homeowners who are due to roll off their current rate may be facing challenges from rate increases.

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