Westpac NZ has announced significant reductions in its lending rates following the recent cut in the official cash rate (OCR). These changes, effective from October 10, 2023, will benefit both borrowers and savers across the country. The bank has positioned itself as a competitive player in the lending market, recently becoming the first major bank to offer fixed home loan rates under 5% per annum.
Effective from Friday, Westpac’s advertised two-year special fixed home loan rate will decrease from 4.65% p.a. to 4.49% p.a.. This adjustment marks the lowest rate available among the five largest banks in New Zealand for that term as of Wednesday afternoon. For its variable home loan rates, Westpac will implement a cut of 0.30% p.a. for new customers from October 13 and for existing customers from October 16. Furthermore, most variable business lending rates will be reduced by 0.50% p.a.
Support for Borrowers and Savers
In addition to its lending rate cuts, Westpac is continuing to support savers by maintaining its 32-day Notice Saver rate at 3.00% p.a.. While other variable savings rates will experience reductions ranging from 0.15% to 0.50% p.a., Westpac remains committed to offering attractive options for its customers.
The recent decisions follow last week’s announcement that Westpac had already reduced all its fixed lending home loan rates. The bank introduced a new one-year advertised special home loan rate of 4.49% p.a., which is among the most competitive rates available for terms ranging from one to five years. It is noteworthy that approximately 90% of Westpac’s home lending portfolio is tied to fixed rates.
Economic Impact and Customer Benefits
According to Sarah Hearn, the Managing Director of Product, Sustainability and Marketing at Westpac NZ, the impact of lower interest rates is becoming increasingly evident in households’ financial situations. “Our popular one-year advertised special home loan rate has fallen by 1.80% p.a. over the past 12 months,” Ms. Hearn stated. This change means that a customer with a $300,000 mortgage on a 15-year term would see a monthly repayment reduction of approximately $285 compared to the previous year.
Hearn emphasized that the bank recognizes the concerns of savers as rates decline. She noted, “We continue to offer one of the leading savings rates in the market on our 32-day Notice Saver product.”
Despite ongoing economic uncertainty, Hearn expressed confidence that the decrease in lending rates will provide homeowners and businesses with greater assurance as they plan for the future. “We’re here to help them grow by offering great products, services, and digital functionality, as well as competitive rates,” she added.
With these strategic adjustments, Westpac NZ aims to enhance its support for both borrowers and savers, reinforcing its commitment to delivering value in a dynamic financial landscape.
