Westpac is cutting interest rates on various fixed-rate mortgages by up to 0.2 percentage points, as it bets the Reserve Bank will stimulate the economy to allow banks to offer lower fixed borrowing costs., Westpac is lowering fixed-rates across three, four, and five-year products for owner-occupiers who pay principal and interest.It is also cutting fixed rates for investors, a part of the market that has been particularly weak, across two, three and five-year terms.
The lower rates are being offered to those who take out a "package" deal, which involves customers holding other financial products with the bank, such as a transaction account. Fixed interest rates are also affected by the financial market's outlook for official interest rates set by the RBA, so it has become cheaper for banks to offer lower fixed rates in recent months, as financial markets have placed growing bets the RBA will cut interest rates from a record low of 1.5 per cent this year.RateCity, a comparison website, said 40 lenders had cut fixed rate mortgages this year, and more were likely to follow the latest changes from CBA and Westpac.