Major bank changes some home loan rates, with one going down - and others increasing

Tuesday, 9 December 2025

Westpac bank has unveiled adjustments to its fixed-term home loan rates following the recent rise in wholesale interest rates with the Reserve Bank’s November Official Cash Rate (OCR) announcement.

Effective Wednesday, Westpac will reduce its 6-month fixed-term special rate to 4.69% per annum, positioning it as the lowest rate among the five largest banks, as of 3pm Tuesday.

However, the bank was increasing its rates for longer fixed terms, ranging from 2 to 5 years, by 0.30%. The new two year rate in the bank’s ‘special’ tier, for example, was 4.75%, while the new five year rate was 5.29%.

The ‘standard’ tier rates offered by Westpac were 5.35% for two years, and 5.89% for five years. The 6-months rate in this tier was 5.29%.

The one year and 18-months rates were unchanged on 4.49% and 4.45% respectively for the special, and 5.09% and 5.05% for the standard rates.

Alongside these changes, Westpac was increasing longer-term deposit rates, reflecting a broader shift in the market.

Sarah Hearn, Westpac NZ’s Managing Director of Product, Sustainability, and Marketing, explained that while the OCR had dropped, wholesale borrowing costs for fixed home loans had sharply risen, impacting rates.

'Fixed rates are mainly influenced by movements in wholesale interest rates, rather than the OCR,' Hearn said.

'While the OCR has fallen, wholesale rates have increased by more than 0.4% on longer terms since the day before the OCR announcement.'

Despite these increases, Hearn said that Westpac was absorbing some of the rise in costs, particularly for fixed-term borrowers.

'With today’s changes, we’re holding back some of the increase in wholesale borrowing costs to customers, while also offering great value for those looking for short-term flexibility with our new 6-month special rate.'

Westpac also sought to support its savings customers, noting that with interest rates falling, the bank was adjusting its longer-term deposit rates upwards, particularly for terms of one year or longer. The bank’s variable Notice Saver rate remained unchanged at 3% per annum.

'We understand that both borrowers and savers are closely monitoring interest rate changes,' Hearn added.