Major bank changes home loan interest rates

by AB16 Mar 2017
NAB has today announced a range of changes to its home loan interest rates, including a new special fixed rate for first home buyers – the lowest rate ever offered by NAB – and increases to interest rates for new and existing owner occupier and residential investor borrowers.

For prospective first home buyers, the Special NAB 2 Year Package Fixed Rate is now 3.69% p.a. effective from today (16 March).

Owner-occupiers see the NAB Standard Variable Rate increase from 5.25% p.a. to 5.32% p.a. while residential investors can borrow under an increased rate of 5.80% p.a. from 5.55% p.a. Both these changes are effective from 24 March.

NAB chief operating officer Antony Cahill said: “The decisions we make on interest rates are difficult ones, and we want to assure our customers we do not take them lightly as we seek to achieve the right balance for all our stakeholders while considering the dynamic financial and economic environment in which we operate.

“The difference between what we charge and how much it costs us to fund a mortgage remains under pressure, with intense competition, increasing regulation, and elevated funding costs.

“By making a series of changes, both up and down, we are seeking to balance these across our entire mortgage portfolio.”

Cahill added: “Interest rates remain at near historic lows, and around 85 per cent of NAB customers pay below our current standard variable rate through a range of discounts available on our home loan products, including NAB Choice Package, and our highly competitive fixed rate terms.

“We understand these changes will affect customers in different ways, and we always encourage customers to have a conversation with their banker or broker about what home loan suits them best.”

First home buyers

From today, NAB is offering first home buyers a record low 3.69% per annum fixed rate for two years, for owner occupier, principal and interest loans. This compares to NAB’s current advertised 2 year Package Fixed Rate for Home Loans rate of 3.98% per annum.

“Every dollar counts when you’re buying your first home, and this offer for first home buyers will provide real support to Australians wanting to enter the property market,” Cahill said.

“This is the lowest home loan rate ever offered by NAB, and it will help Australians entering the property market for the first time to achieve their home ownership dreams.” Eligible customers will save around $50 a month in repayments over the two year fixed period with this special offer (based on a $300,000 loan).

NAB has also recently introduced changes to help more first home buyers secure a home loan.

“We know it can be hard for prospective first home buyers to save for a deposit and rent at the same time, so we now recognise rental history as a form of ‘genuine savings’ in home loan applications,” Cahill said.

Owner occupiers

NAB’s Variable Rate for Home Loans (Standard Variable Rate) for owner occupier customers will increase by 0.07% per annum, to 5.32% per annum, from Friday 24 March 2017.

This change will see NAB customers with a standard variable rate home loan pay an extra $13 each month on their home loan principal and interest repayments (based on a $300,000 loan over a 30-year term).

“I encourage customers who want certainty about their repayments, or to find out what other options are available, to speak with their banker or broker, and whether a package, fixed rate, or split home loan might be right for their circumstances,” Cahill said.

Residential investor borrowers

From Friday 24 March 2017, NAB’s Variable Rate for Residential Investment Home Loans will increase by 0.25% per annum, to 5.80% per annum.

Cahill said the investor segment continues to be important to NAB. Given strong growth in the investor segment, it is essential that NAB continues to manage its investor portfolio responsibly.

“We’re committed to managing our investor lending growth in line with the regulator’s guidance.”

 

COMMENTS

  • by SEQ Broker 16/03/2017 1:47:18 PM

    Is this at 95% + CAP Lmi? If not , then its not a First home Buyer product is it?

  • by Ivanhoe Broker 16/03/2017 1:55:55 PM

    Fun times!!
    I have around 6 deals lost in their system somewhere due to rubbish turnarounds, and now this.
    Just getting harder and harder.

  • by Sally Field 16/03/2017 2:02:54 PM

    Oh lord here we go. Watch the others follow suit one by one. Oh well guess its NAB's turn to be on the block first this time. Normally its Westpac that stick their neck out first. Can't wait to see all the current affair stories bank bashing, which doesn't help anyone.