BankWest INCREASES fixed rates

[Perth Investor]

As of Monday:

1 year was 5.99% will now be 5.79% (yes I know this is a decrease...)
2 years was 5.19% will now be 5.79%
3 years was 6.09% will now be 6.19%
4 years was 6.19% will now be 6.59%
5 years was 6.19% will now be 6.59%

This is not the sort of thing I like reading. However I didn't share everyone's confidence here about 5 year rates with a 4 in front of it etc...

Let's hope this is not the start of a trend and is just one dodgy bank (owned by the biggest bank in the country...) making untimely adjustments...

Noel

 

[Chris.R_WA]

Is this because every RBA rate drop, technically brings us closer to the bottom of the cycle...thus closer to the upturn in IR's as well ??

Slightly confused

 

[DCI]

As of Monday:

1 year was 5.99% will now be 5.79% (yes I know this is a decrease...)
2 years was 5.19% will now be 5.79%
3 years was 6.09% will now be 6.19%
4 years was 6.19% will now be 6.59%
5 years was 6.19% will now be 6.59%

This is not the sort of thing I like reading. However I didn't share everyone's confidence here about 5 year rates with a 4 in front of it etc...

Let's hope this is not the start of a trend and is just one dodgy bank (owned by the biggest bank in the country...) making untimely adjustments...

Noel

Perhaps spooking customers may help to ice Bw's cake a little

 

[Peter_Tersteeg]

It's probably a bit too close to the announcement for it to be a result of the RBAs decision. Fixed rates tend to be tied to various money markets, not the government. There's also quite a bit of work involved in determining their costing.

It most likely means that BankWest ran out of money at a certain price, has gone back to the market and come back with new pricing. Given they haven't changed their variable rates (yet) supports this.

 

[Bradsdad]

i'm assuming BW got hold of a certain some rather cheap, then lent it out. Their fixed rates were a fair bit below most of the other majors (not their fees ). The increase doesn't make them look a lot different from what the others are offering.

The timeing maybe a bit off in regards to general confidence but I guess it's the publics fault for taking up their fixed rates at the pace they did.
It wouldn't suprise me to see STB bring out a fairly low one in the near future as they to usually grab some cheap funds and offer it out "for a limited time". Lenders will usually try and judge the realease of these "cheap" funds for when other competitors are offering nothing special so it sticks out more.

Anyway, the increase doesn't bother me much as long as there isn't a trend for all others to do the same.


Regards
Steve

 

[Ms Jade]

That is a very generous reading of the situation, PTB. Hopefully you are correct and the more cynical explanation is wrong (That the banks are well aware that we are all waiting to fix).

 

[Perth Investor]

That is a very generous reading of the situation, PTB. Hopefully you are correct and the more cynical explanation is wrong (That the banks are well aware that we are all waiting to fix).

I'm with Ms Jade on this one, I don't share your confidence. Plus if their new funds are more expensinve, who's to say Westpac's won't be more expensive as well?

And previously they were competitive with Westpac, not in front of them, now they are close to half a percent out on 3, 4 and 5 year rates.

I want someone who knows more than me to tell me that the window for fixing rates isn't starting to close...

 

[boomtown]

Someone just did a massive Samurai bond raising in Japan (Westpac?). It was very successful but very expensive.

 

[Peter_Tersteeg]

That is a very generous reading of the situation, PTB. Hopefully you are correct and the more cynical explanation is wrong (That the banks are well aware that we are all waiting to fix).

I'm not saying that this is a reversal in rate trend or it isn't. Frankly I don't have a clue (does anybody else have a crystal ball). I just agree more with Steve's analysis that BW have had some cheap money that has run out and the switch is more coincidental. In the past BW has had a lot of 'special fixed rates' that only lasted for a short period.

Fixed rate pricing has little to do with the lender offering them and a lot to do with the funder behind them. The lender gets the money at a certain price, adds their margin and sells it to the consumer. If they can get their hands on cheaper money in the future, they'll do the same again.

 

[sash]

Could it be the CBA influence....after all they did report 20% higher profit than market expectations.

I was told by a CBA Branch manager that they will not price lead on fixed rates.

 

[JIT]

Any more thoughts on the BW rate increase?

 

[Les]

G'day JIT,

Usual deal - Variable overshoots and undershoots Fixed. So, when do you Fix? Hmmm, for me, it's around the time when a 5yr Fixed suddenly becomes more expensive than the Standard Variable. (Gives me a goal to shoot for, really).

Of course, this current GFC adds a little extra to the mix. I'm a bit flexible, and not so anxious that "I must Fix today" - and hey, if I got it wrong, and have to wear a 0.25% increase, then so be it. It beats the hell out of paying 9% down the track.....

Regards,

 

[chilliaa]

As of Monday:

1 year was 5.99% will now be 5.79% (yes I know this is a decrease...)
2 years was 5.19% will now be 5.79%
3 years was 6.09% will now be 6.19%
4 years was 6.19% will now be 6.59%
5 years was 6.19% will now be 6.59%

This is not the sort of thing I like reading. However I didn't share everyone's confidence here about 5 year rates with a 4 in front of it etc...

Let's hope this is not the start of a trend and is just one dodgy bank (owned by the biggest bank in the country...) making untimely adjustments...

Noel

Of course, Bank West is now a subsidiary of CBA, CBA was granted approval from the treasurer on the 18th of December to acquire Bank West. Once this occurred it was only a matter of time before CBA brought Bank West's lending rate into an approximate version of its own lending schedule, otherwise the sophisticated clients of CBA would be 'demanding' the Bank West rate.

Of course CBA couldnt change the Bank West lending schedules straight away otherwise it could be perceived as oligopolistic practices, so they waited a few months to make their moves.

Like i have mentioned before, this is all Economics 101 game strategy, understand the strategy and you understand the game.