National Australia Bank (NAB) has cut its floor interest rate by 15 basis points to 7.25%, bringing it in line with the Australia and New Zealand Banking Group (ANZ) and the Commonwealth Bank of Australia (CBA).
The rate was lowered from 7.40% last Monday.
“In line with APRA guidelines, NAB applies a floor interest rate of 7.25% p.a. or a buffer of 2.25% p.a. (whichever is higher), along with other serviceability measures, to ensure a customer can sustainably support their lending,” a bank spokeswoman told Australian Broker
“NAB is committed to being a responsible lender, and assesses all applications for home lending based on a range of measures and factors to ensure customers are able to appropriately repay their loan, both today and in the future.”
The floor rate is used to calculate future repayments to assess whether the borrower can afford to service the mortgage in the event of a rise in interest rates.
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