Westpac may have dropped its home loan interest rates in November and December last year, but it has told customers that they won’t start repaying at these lower rates until March.
Despite cutting its variable interest rates in line with the RBA last year, the Big Four lender has told customers that they need to contact the bank if they want lower repayments to kick in before March 2, reported the Sydney Morning Herald.
Customers who fail to do so will be paying more than they need to, with Westpac stating that this is an opportunity for borrowers to get ahead and reduce their loan term. It has been claimed, however, that the delay has allowed the bank to boost its profits at the expense of customers.
Westpac’s standard variable home loan rate was cut by 0.25% on November 14 to hit 7.61% – and by a further 0.25% to reach 7.36% on December 19. Customers that didn’t contact the bank to arrange for repayments to be based on these lower rates will have continued to make repayments at their existing level – based on the pre-cut rate of 7.86%.
According to the Your Mortgage basic repayment calculator, the monthly Principal & Interest repayments on a $300,000, 25-year, home loan at Westpac’s standard variable rate would have dropped by $49.21 in November and by $48.75 in December. Borrowers in this situation, therefore, may have paid close to $300 more than they need to by the time their new repayment schedule kicks in on March 2.
What do you think about the banks’ lending practices? Get in touch with investors and experts in the mortgage and finance section of our property investment forum.
More stories:
