Home loan shake-up: Westpac Group slashes rates by at least 1 per cent across major brands

The Westpac Group – comprising St.George, Bank of Melbourne, BankSA and Westpac – has lowered advertised rates on package variable home loans for new customers.

These reductions are at least 1 percentage point lower, making them among the most significant in recent times and reflect the banks’ responses to evolving economic conditions.

The cuts span various variable loan packages for new customers, including owner occupier and investor loans, with both principal and interest and interest-only repayment options. A packaged rate refers to a home loan that’s bundled with other financial products (e.g. offset account) from the same lender, typically in return for a discounted interest rate and added perks.

The changes come into effect immediately (16 April, 2025). See below for rate adjustments:

New packaged rates with a loan-to-value ratio (LVR) of 70-80%

It’s important to note that the above interest rates do not include any LVR discounts or margins.

Anticipation builds ahead of RBA’s May rate decision

As the Reserve Bank of Australia’s (RBA) next meeting approaches on 20 May, 2025, market expectations are leaning towards a significant rate cut. The cash rate currently stands at 4.10%, but recent economic indicators and global developments have led to predictions of a reduction.​

National Australia Bank (NAB) recently revised its forecast, now anticipating a 50 basis point cut in May, bringing the cash rate down to 3.60%. NAB’s chief economist, Sally Auld, cited intensified global headwinds and a restrictive real cash rate as reasons for this adjustment. She emphasised the need for the RBA to "play catch up" to support economic activity.

Other major banks have also updated their projections. The Commonwealth Bank expects a 25 basis point cut in May, while ANZ has indicated that a larger cut is possible if global economic conditions deteriorate further.

RBA Governor Michele Bullock has acknowledged the uncertainties stemming from recent global trade tensions, particularly the U.S. imposing new tariffs and China’s retaliatory measures. While highlighting the resilience of Australia’s financial system, she noted that it’s too early to determine the exact path of interest rates amid these uncertainties.

Next steps for borrowers

If your home loan rate is still sitting above 7 per cent, it might be time to investigate the cost of refinancing. The difference between 7.84% p.a. and 6.44% p.a. on a $500,000 loan could mean more than $400 in savings each month (not including fees and other charges).

With the RBA’s May decision just weeks away and more lenders potentially following suit, homeowners should stay alert to further movements. If you haven’t reviewed your mortgage in over a year, now’s the perfect time to compare your options and negotiate a better deal.

• Check your rate: If it starts with a 7, you can probably do better.
• Compare and refinance: Search lower rates or contact your lender to ask for a discount.
• Stay updated: Follow Mozo’s live blog for the latest rate cuts, RBA moves and lender changes.