Westpac has cut its fixed home loan interest rates, and some of the reductions are quite substantial. But they are mostly catch-ups

Westpac has cut its fixed home loan interest rates, and some of the reductions are quite substantial.

The result is that they are now generally competitive with Commbank and ANZ.

Fixed rate certainty appears to borrowers who aren't trying to play the "guess the RBA's thinking" game, and would rather lock in the certainty of repayments, and lock out the uncertainty of variable rates.

Currently fixed rates offer lower repayment costs than variable rates, although that is not always the case

Fixed rates also present a more structured opportunity to switch banks, away from the rush of attention around variable rate changes. Being prepared to switch can give you valuable negotiating room, especially if you have strong financials. It should appeal to borrowers who have had their mortgage for a number of years. Variable mortgages allow you to pay down the balance as soon as you have the funds, whereas  you need to wait for the fixed rate contract to roll over to do that with a fixed rate.

However, most borrowers will split their loan between some variable, some fixed. At present, it makes sense to have the fixed portion as the majority.

Westpac's changes affect all LVR tiers, package and non-package options, P&I and interest only. You can see specific changes in our tables here, along with the option to check these rates on a Comparison Rate basis, and an Effective Rate basis that is sensitive to the amount you need to borrow.