Bankwest slashes fixed interest rates on new home loans by up to 0.5 per cent

One Australian bank has cut its fixed rate home loans by half a percentage point. Bankwest, a part of Commonwealth Bank, announced that it will reduce interest rates on most of its fixed rate loans by up to 0.5 per cent, with the changes coming into effect from Thursday. The bank is now offering prospective home loan customers a 5.89 per cent rate on loan-to-value ratios of 80 per cent or less. Loan applications submitted on or after Thursday will be assessed on the new rate. It shapes as relief, with many Aussie home owners struggling amid the cost-of-living crisis and spending crunch brought on by high interest rates, currently at a 13-year-high of 4.35 per cent. On Thursday, Reserve Bank governor Michele Bullock acknowledged that five per cent of borrowers were facing a shortfall between their income and their essential spending including mortgage repayments. She said that some may ultimately decide to sell their homes. Inflation continues to sit at 3.8 per cent, with concerns it could affect tipped cuts to the cash rate early next year. Earlier this week, New Zealand’s central bank announced the first rate cut in four years while the US Federal Reserve Board is expected to make its first reduction later this month.