Bankwest drastically reduces the mortgage rate to three years to get new business


Bankwest owned by the Commonwealth Bank is slashing its mortgage rate as an occupying owner by three years as lenders pursue an ever lower number of suitable home loan customers.

The Perth lender will cut its capital and the interest rate for occupant-owners by half a percentage point to 3.48% from Friday, which the Canstar product comparison service said is the lowest on the market.

Its three-year fixed investor rate will fall to 3.88%.

"The move puts Bankwest in the mix for the market share of the diminished pool of borrowers in the market sprouting all the credit boxes," said Steve Mickenbecker, executive of the Canstar group for financial services.

"All the big banks have cut their fixed rates in recent weeks and the trend has been picked up by the rest of the market."

While the Reserve Bank has resisted the pressure to cut the liquidity rate – which is a factor in the financing costs of banks – creditors have cut mortgage rates to try to stimulate demand in a founding real estate market.

UBank owned by NAB is cutting the rate of three-year fixed occupants to 3.59% from 3.74%, while ME cut the equivalent rate from 3.73% to 3.94% this week.

The pressure on the RBA to cut the cash – a move that could lead to more lenders reducing the cost of the loan – increased on Thursday when official data showed that Australia's unemployment rate increased by 0, 1 percentage points in April to a 5.2 worse than expected cent.




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