Essay: Westpac bank and Home Loans in Australia
Apart from other products offered by Westpac bank, it has home loans that are very helpful to the residents. This is because they are not used for the purchase of homes only but also for the purchase of so many other properties. The home loans are therefore offered at different terms since they cater for different needs. The main types include basic loans, which offer very low interest rates encouraging speed payments when the rates are at their lowest with variable interest rates. Standard variable rate loans have a bit higher interest rates than the basic home loans but they are flexible and more features with an option to the borrowers to split variable and fixed portions to get rid of penalties. There are also fixed rate loans, which are ideal for risk-averse borrowers since after the fixed time of interest expires, the borrowers can switch to any other form of rate that favors them. There are also loans for borrowers with irregular or low incomes (Westpac Banking Corporation, 2010).
The different types of loans offered by Westpac bank make it easy for all types of borrowers to be able to borrow. The rates are also encouraging and affordable.
Reserve bank interest rates
The interest rates offered by the reserve bank to the other banks rose from 4-4.25% on 6, April 2010. This follows another rise of 0.25% that was done in March. This rise is expected to increase average mortgage to offer more to homeowner borrowers. This step is seen to prevent risk the outcome for a property bubble since housing credit is on the increase but approvals have been slowed. With increased interest rates, it is expected that borrowing will be reduced and only turn as long-term investments (Jackson, 2010).
Depending on the problem at hand, the move is not encouraging to the borrowers but by decreasing borrowing, property bubble risk is prevented. This is a good move by the monetary policies of Australia to solve some economic issues. It is effective since it has yield positive results.