Westpac doubles mortgage discounts

Via Banking Day:

Messing around with home loan pricing and promotion in a manner loathed by regulators, Westpac has sweetened home loan incentives by almost doubling the rate discount offered to new home buyers that take out a packaged mortgage deal with the bank.

In a move likely to trigger responses from the three other major banks, Westpac has boosted the mortgage rate discount for package borrowers to 1.29 per cent from 0.7 per cent.

The new discount, effectively lowers the standard variable rate on Westpac’s Rocket Repay mortgage from 4.98 per cent to 3.69 per cent.  This price point took effect on all loan applications lodged with the bank from Monday, 22 July.

Home loan experts described the move as “aggressive” and likely to induce reactions from CBA, NAB and ANZ.

“I think this is a very aggressive decision relative to the discounts currently offered by the other big four banks,” said Canstar’s director of ratings, Steve Mickenbecker.

“It will lead to repricing responses from Westpac’s main competitors.”

The race is on.

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