Westpac chops home loan interest rates

Westpac has cut some of its short term home loan interest rates with the biggest cut being made to its revolving credit product.

Monday, September 14th 2009, 3:30PM

The three changes made today are:

• Variable rate down 20 basis points to 6.29%
• Six-month fixed rate down 10 points to 5.29%
• Revolving credit down 80 points to 5.69%

The moves, according to www.mortgagerates.co.nz, give Westpac the best six-month rate in the market and places its 19 basis points below the main bank median rate for this term.

"These rate moves reflect our desire to offer extremely competitive home loan options along with leading service and value through our local banking network," Westpac general manager of retail banking Bruce McLachlan says.

While the bank has reduced its standard variable rate 20 points, the bigger change was to its Choices Everyday Home Loan product.

This is a revolving credit facility which offers customers either a redraw option or an option to reduce their limit.

In this space it is well below its competitors. The median big bank revolving credit rates is 6.53% according to www.mortgagerates.co.nz.

"These rates show that considerable benefits are flowing through to New Zealanders at a key point in the economic cycle," McLachlan says.

He gives the following examples to illustrate the benefits:

• A borrower coming off a two-year rate of 9.25% to fix at 5.29% for six months (assuming $200,000 mortgage on a 25-year term) could expect monthly repayments to reduce by around $500 ($1,700 down to $1,200 per month).
• A borrower with a floating rate of 6.49% and going to 5.69% would save around $130 in interest each month.

See how Westpac's rates stack up at www.mortgagerates.co.nz

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