Westpac cuts to unveil lowest big four variable mortgage rate

Westpac has quietly unveiled new variable home loan rates for eligible borrowers applying through the bank’s digital channels.

Westpac‘s lowest variable rate has fallen 10 basis points to 5.24% p.a. (5.25% comparison rate*) – a special offer advertised to owner-occupiers with loan-to-value ratios (LVRs) of up to 70%. 

That sees Westpac undercutting the variable rate on its nearest big four rival, CommBank‘s Digi home loan, by 10 basis points.

Investors have also seen the bank’s lowest-rate deal drop by 20 basis points to 5.39% p.a. (5.40% p.a. comparison rate*) – another special offer for those with LVRs up to 70%.

The offer represents a life-of-loan discount of up to 2.49% p.a. on the headline rates offered on the bank’s ‘no-frills’ Flexi First Option home loan products, plus an extra 0.10% discount for those with deposits or equity worth at least 30% of their property’s value.

In addition to dropping rates, Westpac has also opened the special offer up to more borrowers.

The big bank’s Flexi First home loan has long offered discounts for those refinancing their home loan with the bank directly through its digital channels, rather than via a broker or branch.

Now, those discounts are also offered to new home loan applicants purchasing a home or investment property.

Though, existing Westpac mortgage holders considering refinancing to a new product through the bank are ineligible for the discount.

Westpac slashes special offer variable home loan rates

Here are the latest special offer variable rates on the table for direct-to-bank applicants turning to Westpac and making principal and interest repayments:

How do Westpac variable mortgage rates compare?

The bank’s latest cut comes weeks after it revealed fixed rates as low as 4.89% p.a. (5.88% p.a. comparison rate*) for eligible owner-occupiers fixing for two years.

It now also takes the cake for the lowest variable and fixed rates offered from any of the big four banks, the lowest rates available at each are as follows:

However, looking at the broader market, Westpac is bested by many smaller market players.

Variable rates as low as 5.19% p.a. (comparison rates* starting from 5.20% p.a.) are offered to the general owner-occupier market by select mutual banks, including Greater Bank, Summerland Bank, and The Mutual.

Meanwhile, Police Bank offers variable rates as low as 5.09% p.a. (5.16% p.a. comparison rate*) for eligible first home buyers turning to the 5% Deposit Scheme and Bank Australia has rates as low as 5.13% p.a. (5.47% p.a. comparison rate*) on the table for eligible owners of energy efficient properties.

Westpac predicts three more RBA rate cuts

In addition to pipping its big four peers when it comes to their lowest advertised interest rates, Westpac is also the most optimistic of further Reserve Bank of Australia (RBA) rate cuts.

The RBA has dropped the cash rate three times in 2025, lowering it by 75 basis points, and home loan lenders have largely followed by dropping variable mortgage rates.

Westpac still forecasts one more 2025 rate cut to come in November and predicts another two will be handed down in 2026, in February and May.

That’s compared to CommBank and ANZ, which both tip the next cut to come in February 2026, and NAB, which expects the market will be waiting until May 2026 for another cut.

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