Westpac (ASX:WBC) share price rises amid mortgage rate shake-up

The banking giant has revealed changes to its fixed and variable mortgage interest rates

| More on:
Man puts arm around woman and kisses her cheek outside their new home

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Westpac Banking Corp (ASX: WBC) share price has stepped into the green from the opening of trade on Tuesday.

Westpac shares are up 0.45% to $25.89 after the banking giant announced changes to its fixed and variable mortgage interest rates.

Let's investigate further.

What did Westpac do?

In a potential impact to the Westpac share price, the bank made some tweaks to its variable and fixed interest rates as part of its home mortgage business.

To illustrate, the bank advised it will reduce its introductory variable rate by 20 basis points to 1.99%. This haircut applies to loans with a 70% loan-to-value ratio, meaning homebuyers will still need a 30% deposit upfront to qualify.

The move makes Westpac the first Australian lender to sink its variable rates below the 2% mark.

However, in what seems a balancing act, Westpac concurrently increased its fixed rates on four and five-year maturities by 30 basis points.

What does this mean for Westpac and its customers?

In its third-quarter activities report, Westpac said its organic growth in home financing was on par with the average of its peer group.

Furthermore, the moves come after the bank announced it would move 1,000 jobs back on Australian soil after Covid-19-related disruptions overseas, The Australian reported today.

Moreover, Westpac will extend the variable rate through to its other brands. For example, St George Bank and Bank of Melbourne will have the lowest two-year fixed rate of 1.79%.

Westpac is "fighting to get back" into the mortgage domain, after "ceding market share to rivals" CBA and NAB, The Australian says.

RateCity.com.au analyst Sally Tindall was quoted as saying that although the variable rate change is "reserved for new customers … that shouldn't stop existing customers from picking up the phone and asking for a lower rate".

Westpac share price snapshot

The Westpac share price has posted a year-to-date return of 33%. It has also fallen 51% over the past 12 months.

Over the last month, Westpac shares have climbed around 5%.

These results have outpaced the S&P/ASX 200 Index (ASX: XJO)'s gain of around 23% over the last year.

The author Zach Bristow has no positions in any of the stocks mentioned. TheMotley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Bank Shares

Woman calculating dividends on calculator and working on a laptop.
Bank Shares

Buying CBA stock today? Here's the dividend yield you'll get

CBA's yield right now might surprise you.

Read more »

A financial expert or broker looks worried as he checks out a graph showing market volatility.
Bank Shares

How much would the ASX 200 fall if CBA shares returned to 'fair value'?

CBA shares account for 12% of the ASX 200.

Read more »

A woman sits in a cafe wearing a polka dotted shirt and holding a latte in one hand while reading something on a laptop that is sitting on the table in front of her
Dividend Investing

How are these passive income investors earning a 7.5% dividend yield on their surging CBA shares?

CBA shares are proving more lucrative for some passive income investors than others.

Read more »

A woman in a bright yellow jumper looks happily at her yellow piggy bank.
Bank Shares

$10,000 invested in CBA shares in FY25 is now

Let's see whether it was a successful 12 months for bank investors in the last financial year.

Read more »

Woman with spyglass looking toward ocean at sunset.
Bank Shares

What could happen to the big 4 banks in FY26?

What’s in store for the big four banks over the next 12 months?

Read more »

Bank building in a financial district.
Bank Shares

Which is the only ASX 200 bank stock Macquarie expects to outperform in FY 2026?

Macquarie forecasts a tough year ahead for the ASX 200 banks, with only one expected to outperform.

Read more »

a couple and their baby sit together at their computer carrying out digital transactions and smiling happily.
Bank Shares

Is the NAB share price a buy for passive income?

Should investors buy into this major bank for income?

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

Fresh high of $192: Here's how many records CBA shares have hit in 2025

CBA's record count for 2025 is getting ridiculous.

Read more »