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Westpac takes the chainsaw to fixed rates; first big bank rate under 5%
29 Aug 2025
Westpac has today cut fixed rates by up to 0.70 percentage points, becoming the first big bank to offer a fixed rate under 5% in the current cycle.
The bank’s lowest advertised fixed rate now starts from 4.89% for its two-year term for owner-occupiers paying principal and interest with a 30% deposit.
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| Westpac’s changes to fixed rates | ||
|---|---|---|
| Term | New rate from | Change % pts |
| 1-year | 5.19% | -0.50 |
| 2-year | 4.89% | -0.70 |
| 3-year | 5.29% | -0.60 |
| 4-year | 5.59% | -0.30 |
| 5-year | 5.59% | -0.30 |
Source: Canstar. Notes: based on owner occupied loans with principal and interest repayments. LVR and other requirements apply.
The rate cuts also span the Westpac group, including St George, Bank of Melbourne and BankSA, with cuts, in some cases, of up to 0.90 percentage points for some fixed terms.
How the big four banks fixed rates stack up
Today’s cuts make Westpac the market leader on fixed rates among the big four banks, holding the lowest fixed rates across the board except for the three-year fixed rate, where it shares the title with NAB.
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| Big four banks’ lowest fixed rates | ||||
|---|---|---|---|---|
| Term | CBA | Westpac | NAB | ANZ |
| 1-year | 5.49% | 5.19% | 5.29% | 5.29% |
| 2-year | 5.44% | 4.89% | 5.19% | 5.19% |
| 3-year | 5.34% | 5.29% | 5.29% | 5.34% |
| 4-year | 5.79% | 5.59% | 5.69% | 5.74% |
| 5-year | 5.94% | 5.59% | 5.69% | 5.74% |
Source: Canstar. Notes: based on owner occupied loans with principal and interest repayments. LVR requirements apply.
The Westpac group joins a growing cohort of lenders cutting fixed rates. Canstar analysis shows 30 banks have cut at least one fixed home loan rate in the past month.
Lowest fixed rate in market sits at 4.69%
The list of lenders offering at least one fixed rate under 5% has shot up. Our analysis shows a total of 27 lenders now offer a fixed rate under 5%. At the start of the year, there were none.
The lowest available rate in the market, excluding eco loans, is 4.69% (5.29% comparison rate), offered by Easy Street Financial Services for a two-year term.
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| Lowest fixed rates on Canstar | ||
|---|---|---|
| Term | Lender | Lowest rate from |
| 1-year | Pacific Mortgage Group | 4.84% |
| 2-year | East Street Financial Services | 4.69% |
| 3-year | Pacific Mortgage Group | 4.84% |
| 4-year | BOQ, Macquarie Bank, People’s Choice | 5.29% |
| 5-year | BOQ, Heritage Bank, Macquarie Bank, People’s Choice | 5.29% |
Source: Canstar. Excludes eco loans.
Westpac takes the lead with lowest fixed rate of the big banks
Canstar’s data insights director, Sally Tindall says, “Westpac has taken a chainsaw to its fixed rates today, cutting some by as much as 0.70 percentage points.”
“It’s a decisive move from the big four bank. Today’s cuts mean Westpac now has the lowest fixed rate out of the majors.
“The move is likely to be in response to an easing in the cost of fixed rate funding and the strong possibility of further easing from the RBA. There’s also likely to be an element of competition driving Westpac’s decision today, despite the fact that fixing is not yet back in vogue with customers.
“This is also the first time in the current cutting cycle that a big bank has dropped a fixed rate below the 5 per cent benchmark. That’s a considerable milestone and signals just how competitive the mortgage market is.
“For borrowers, the fixed versus variable decision is still a crystal ball exercise. The maths between the lowest fixed and variable rates is tight and ultimately depends on the future of the cash rate.
“While the RBA has said that further easing is likely, there’s still not a huge amount of clarity on how many cuts are to come in the cycle. Plus, there’s always the wildcard that some banks might not pass on future cuts in full.
“With so many variables at play, it’s no surprise the majority of borrowers are sticking with variable for now, because the consequences of getting fixed rate decisions wrong can often be more significant.
“However, if you do like the idea of fixing and know it will suit your finances, spend time shopping around for a competitive rate. While Westpac is now chasing the market leader, there’s still 0.20 percentage points between the two.”
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