Westpac lowered variable interest rates for owner-occupiers paying principal and interest by eight basis points, bringing down the standard variable rate to 5.24%. This will save borrowers $15 per month on a standard $300,000 thirty-year loan.

This is the second lowest standard variable rate (SVR) for this type of loan among the Big Four, right behind Australia and New Zealand Banking Group (ANZ).

Westpac’s latest move was announced 11 days after ANZ said it would slash principal-and-interest home loan rates for mortgage holders to encourage them to shift away from interest-only loans.

On the other hand, interest-only investors are once again getting slammed, and Westpac’s standard variable rate for this category will climb by 34 basis points to 6.3%, the highest among the Big Four.

These announced changes will take effect on June 30.

Banks will continue to court principal-and-interest customers

John Flavell, CEO of Mortgage Choice, said banks remain keen on customers paying principal and interest on their home loans. Hence, they will continue to roll out competitive deals.

“All of Australia’s lenders are hungry for owner-occupier, principal-and-interest business at the moment and are willing to slash their rates in order to attract this type of customer,’’ Flavell said. “Owner-occupiers who are making principal-and-interest repayments on their mortgage should take the time to look around and see if there is a better deal on the market. They are an appealing type of customer and should take advantage of this fact while they can.”

Westpac’s subsidiaries, including St George, Bank of Melbourne, and BankSA, also moved their rate deals on Tuesday. 
 

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan