Westpac discounts new loans amid rate hike

Westpac is trying to entice fresh home loan customers with average discounts of $90 a month at the same time it slugs existing mortgage holders with a rate rise.

The bank is offering new borrowers discounts up to 0.80 percentage points off standard rates for new lending only.

It takes effect on Wednesday, just as Westpac becomes the first of the big four to hike its variable interest rate by 0.14 percentage points.

ANZ and the Commonwealth Bank are due to raise their rates in the next fortnight.

The National Australia Bank continues to hold steady, saying it wanted to regain customer trust amid the fallout of the financial services royal commission.

Westpac is offering a variable base rate of 3.98 per cent, including a 0.75 percentage point discount for the life of the loan, to attract new customers to its flexi first option home loan.

At that rate, mortgage-holders with a typical $400,000 loan would save an average of $91 a month during a 30-year term.

The promotion will replace the banks’ current two-year introductory discount loan offer.

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