The Westpac Banking Corp (ASX: WBC) share price has stepped into the green from the opening of trade on Tuesday.
Westpac shares are up 0.45% to $25.89 after the banking giant announced changes to its fixed and variable mortgage interest rates.
Let's investigate further.
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What did Westpac do?
In a potential impact to the Westpac share price, the bank made some tweaks to its variable and fixed interest rates as part of its home mortgage business.
To illustrate, the bank advised it will reduce its introductory variable rate by 20 basis points to 1.99%. This haircut applies to loans with a 70% loan-to-value ratio, meaning homebuyers will still need a 30% deposit upfront to qualify.
The move makes Westpac the first Australian lender to sink its variable rates below the 2% mark.
However, in what seems a balancing act, Westpac concurrently increased its fixed rates on four and five-year maturities by 30 basis points.
What does this mean for Westpac and its customers?
In its third-quarter activities report, Westpac said its organic growth in home financing was on par with the average of its peer group.
Furthermore, the moves come after the bank announced it would move 1,000 jobs back on Australian soil after Covid-19-related disruptions overseas, The Australian reported today.
Moreover, Westpac will extend the variable rate through to its other brands. For example, St George Bank and Bank of Melbourne will have the lowest two-year fixed rate of 1.79%.
Westpac is "fighting to get back" into the mortgage domain, after "ceding market share to rivals" CBA and NAB, The Australian says.
RateCity.com.au analyst Sally Tindall was quoted as saying that although the variable rate change is "reserved for new customers … that shouldn't stop existing customers from picking up the phone and asking for a lower rate".
Westpac share price snapshot
The Westpac share price has posted a year-to-date return of 33%. It has also fallen 51% over the past 12 months.
Over the last month, Westpac shares have climbed around 5%.
These results have outpaced the S&P/ASX 200 Index (ASX: XJO)'s gain of around 23% over the last year.
