Bankwest Capped Rate Home Loan - Review

Attention home owners and investors. Bankwest (owned by CBA) has brought back 'capped rate home loans'.

A capped rate home loan is generally a variable rate loan with, you guessed it, a 'capped' rate. A certain interest rate it will not rise above even if variable rates and the Reserve Bank rates are sky high above it.

These loans were more popular 20 years ago or so but haven't been seen too often in recent times until now. Bankwest has made a name for itself with creative loan options in the market place over the last 24 months with loans like the Rate Tracker Ultra now brings you the Capped Rate Home Loan!

Right time for Capped Rate Home Loans?

There is a general consensus that rates are extremely low at the moment and will eventually rise back to their usual heights (approx 7-8%). With this in mind most of our customers are interested in fixing and want to hear about their options.

Unfortunately at the moment we are usually offering them variable rate loans well below 5% and fixed rate loans seem to have a lot of the expected future rate rises already built in.

Today the best 3 year fixed rate we could find in the market is 6.65% and the best 5 year fixed rate is 6.99%. Upon this news the majority of people are today choosing variable rates.

Bankwest Capped Rate Home Loan - Key Features

In such a market you can certainly see why 'a capped rate loan' may be attractive. Let's take a look at Bankwest's capped rate home loan more closely.

  • Application fee: $750
  • Extra fee for choosing capped rate option: 0.15% x the loan amount
  • Monthly fee $12
  • Rate: 5.6% with a cap until 10th November 2012 of 7.5%. (It will not go higher than 7.5%)
  • Free redraw

Bankwest Capped Rate Home Loan - Evaluation

  • Fees and rates are a little higher than with normal variable rates.
  • Rate cap lasts for approx. 4 year (10th November 2012) so next to fixed rates of 6.65% of 3 years and 6.99% for 5 years a cap of 7.5% is comparable.
  • Loan does let you take advantage of lower variable now and have safety in knowing can't go above 7.5% for 4 years however this could be matched with part variable and part fixed loans depending on your strategy and situation.
  • 3 stars out of 5

All in all not a bad option, and certainly a good one if you believe rates will stay low for a couple years and then will go sky high (like many professionals do).

Your best bet is to fill enquiry form on this page or give us a call and discuss the best loan for you and your situation together taking into account your future plans and different scenarios till we get it right. Whether it is Bankwest Capped Rate Home Loan or another lender's product that fits you better.

Get your quotes now

What to find out more? Enquire now

Published on September 9-th, 2009 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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Any information or advice contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs.