Westpac cuts loan rates for first buyers

THE mortgage war among lenders hungry for first homebuyer market share has intensified after one of the nation’s biggest banks revealed it was dropping rates for entry-level buyers.

Westpac has announced it is reducing rates for those hoping to get their feet on the property ladder by rolling out rock-bottom deals on both fixed and variable rate deals for new customers.

The reduction to deals of 40 basis points will also see fees cut and no establishment fees or monthly fees included on the deals. The offers are being offered from tomorrow for new customers.

The bank will drop its threeyear fixed rate offer to 3.79 per cent for first-time owner occupiers.

Financial comparison website Mozo’s database shows this is the cheapest of the big four banks.

Westpac also reduced three-year fixed loan loans for first-time investors, reducing the rate to 4.09 per cent.

On variable rate loans they are rolling out a five-year introductory offer which includes a discount of 80 basis points to 3.79 per cent.

First-time buyers make up 25.8 per cent of the total owner occupier housing market excluding refinancing — this is the highest level since December 2012 — the Adelaide Bank/ Real Estate Institute of Australia Housing Affordability Report recently revealed.

Home Loan Experts’ managing director Otto Dargan welcomed the deals but said there are even “better deals for someone with a larger deposit or who is refinancing.”

“Customers need to be mindful of discounts expiring and should set a reminder in their calendar for five years later to make sure that they check their rate,’’ he said.

Westpac’s Andy Wright said the new deals would assist those trying to crack into the property market.

Meanwhile, National Australia Bank is still offering its lowest fixed-rate deal for first home buyers at 3.69 per cent for two years, the best of the big four banks.

But smaller lenders are still hungry for market share; lender Reduce Home Loans just dropped its variable rate loan deal to 3.39 per cent, a fall of 10 basis points. This is for borrowers with a loan-to-value ratio lower than 80 per cent.