The Biking Broker Newsletter - 15th June 2009

Westpac announce fixed rate rise

Today, Westpac have announced fixed rates will increase effective tomorrow, 16 June, 2009, by up to 0.50% citing costs of funding.

Premier Advantage Package clients can fix and split their loans at no charge.

Standard variable rates have remained unchanged.

Some explanation and pros/cons from Westpac:

1. Why have Westpac fixed rates increased again?

• Fixed rate pricing is impacted by the long term money market rates. As such, fixed rates will increase due to the cost that Westpac is borrowing at becoming more expensive.

2. Should I advise you to fix your loan(s)?

• There is a lot of speculation in the market about variable interest rates and Westpac cannot predict Reserve Bank of Australia rate decisions. The Commonwealth Bank of Australia has today increased their fixed rates.
• However, to reduce interest rate uncertainty, customers might like to consider splitting their loan or fixing a portion. Under Premier Advantage Package there is no cost to fix/split a portion or all of the deal.
• Customers need to consider their own financial situation and seek independent advice when considering the option to fix their loan.

3. What are the benefits of fixing a loan?

• Interest rate certainty for a specific period of time .
• Repayment certainty, which will assist customers with their budgeting.

4. What are the disadvantages of fixing a loan?
The main disadvantages are:

• The interest rate will be fixed for a specified period, regardless of any movement in variable rates.
• Customers may incur a break cost if they:
  • Break out of their fixed rate early either through switching or discharging or
  • Make additional payments of more than $25,000 per fixed rate term during the fixed period.

Term	Current Rate (Stand Alone) %	New Rate (Stand Alone) %	New Rate (Premier Advantage Package) %	Change %
1 year	5.39	5.49	5.29	+ 0.10
2 year	5.79	5.99	5.79	+ 0.20
3 year	6.09	6.59	6.39	+ 0.50
4 year	6.69	7.19	6.99	+ 0.50
5 year	6.69	7.19	6.99	+ 0.50
6 year (IPL only)	7.29	7.79	7.59	+ 0.50
7 year	7.29	7.79	7.59	+ 0.50
9 year (IPL only)	7.29	7.79	7.59	+ 0.50
10 year	7.29	7.79	7.59	+ 0.50
12 year (IPL only)	7.29	7.79	7.59	+ 0.50

*new rates effective 16/6/09

If you want to fix your rate, call The Westpac Mortgage Centre (132 558) TODAY (15/6/09)