Small fry takes on on the big banks

BankWest has introduced a new home loan which aims to beat the big banks. The new Rate Tracker home loan is an introductory mortgage offering customers an interest rate 0.75% pa lower than the average standard variable rate of the big four banks for the first two years of the loan.

The rate is currently sitting at 8.23% pa and is 0.79%pa lower than the highest rate of the big four. (9.02% pa charged by ANZ).

After the introductory period is over the rate will revert to that of the BankWest Lite home loan, which at 8.43% pa is competitive.

BankWest's Rate Tracker loan requires a minimum loan of $100,000 with no maximum, has a $700 application fee but there are no deferred establishment fees.

The Rate Tracker is the first product in BankWest's new "happy banking" initiative.

"We want to change customers' perceptions of banking and show them how we are making banking a more enjoyable, positive experience," says BankWest head of mortgages and savings, Paul Vivian. "Happy Banking will encompass everything we do — it's not one thing, it’s everything we do and we want our customers to feel happy with our products, our service, our staff and our stores."

While the thought of beating the big banks will no doubt appeal to borrowers, it's not the only product that offers a lower rate than the banks’ standard variable.

According to Infochoice, few borrowers actually pay the standard variable rate. "The range of rates on offer for full-featured loans (to which the 'standard variable' label is applied) are spread over a very wide range from 7.59% up to 9.02%,” says Infochoice, with the weighted average currently 8.41%.

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