- When rates go down, so does the customer's rate, because its variable
- If they go up, the rate is capped at 7.50% during the capped period
- Variable rate is competitive with other standard variable rates in the market
- A win-win for the customer - security of a fixed rate loan, minus the inflexibility
Customer champion Bankwest will tomorrow (Wednesday 9 September) introduce further
competition to the mortgage market by introducing its new Capped Rate Home Loan - the only
one of its kind in the Australian mortgage market.
The innovative home loan offers customers the benefits of a variable rate that is comparable to
the current market average (see Table 1 below), with the added security of a cap until 10
November 2012.
Table 1- Bankwest Capped Home Loan Variable Rate compared to major banks
| Bankwest | |
Bankwest Capped Home Loan Variable Rate | 5.40% |
Bankwest Standard Variable Rate | 5.70% |
| Big Four Banks | Standard Variable Rate |
CBA | 5.74% |
NAB | 5.74% |
Westpac | 5.81% |
ANZ | 5.81% |
 | |
The Capped Rate Home Loan has a market leading 5.40 per cent p.a.variable rate (comparison
rate of 5.56% p.a.1), and a capped rate of 7.50% p.a. (comparison rate of 7.65% p.a.2) until 10
November 2012.
This means that during the capped period, rates can decrease, but cannot exceed the capped
rate.
Bankwest's Head of Mortgages Dean Gillespie said the new offering underlined Bankwest's
ongoing commitment and determination to provide Australians with more choice by increasing
competition in the mortgage market.
"This unique and innovative product is further proof that Bankwest is paying attention to what
Australians want from a home loan product and delivering," Mr Gillespie said.
Recent Bankwest / Mortgage and Finance Association Research found that 75 per cent of
people think that interest rates have hit a low point.
"This product has been specifically designed to offer customers the opportunity to make the
most of the current low interest rates, whilst the cap will provide peace of mind for when the
rates inevitably start to rise," Mr Gillespie added.
He said the Bankwest/MFAA research also revealed that less than 60 per cent of people have a
clear preference when it comes to fixed or variable loans.
"Many people who don't have a definitive preference when it comes to fixed or variable loans
would benefit from a home loan that offers the advantages of both, Mr Gillespie said.
"Many Australians shop around for a home loan without a specific preference for variable or
fixed. This new hybrid product offers customers the opportunity to have both."
