Westpac has reduced interest rates on fixed-rate mortgages by up to 0.2 percentage points, following a recent round of similar decreases by ANZ, the Commonwealth Bank and many of the smaller lenders.

Westpac is lowering fixed-rates across three, four, and five-year products for owner-occupiers who pay principal and interest. It is also reducing fixed rates for investors across two, three and five-year terms.

The biggest cut for owner-occupiers was a 0.2 percentage point reduction in the four-year fixed rate, to 4.09%, matching CBA. For investors, the biggest cut is a 0.2 percentage point reduction on its three-year loan, to 3.99%, also matching CBA.

It comes as banks are facing slower loan growth after the increased scrutiny of banks led many to slow down their loan approval times.

The Westpac cuts will apply only to customers taking out a new fixed-rate loan. They do not affect interest rates on variable rate loans, which are the most common type of mortgage in Australia.