Members of the industry are praising National Australia Bank’s (NAB) decision to hold their interest rates.
The other three major lenders have hiked rates this month despite the Reserve Bank of Australia (RBA) keeping the cash rate on hold for more than two years.
Smaller lenders have also been raising rates over the last few months to keep up with increased funding costs, as the bank bill swap rate is sitting above the RBA’s rate.
After Westpac, ANZ and then CBA made their announcements, the industry waited for NAB to make the ‘inevitable’ move.
However, yesterday, the major chose to announce it would be holding its rate.
NAB CEO Andrew Thorburn said they were “listening and acting differently” by keeping its standard variable rate for home loans at 5.24%.
Some feedback and comments after the announcement suggested distrust of the bank’s motives, but it was welcome news from some.
Peter White from the Finance Brokers Association of Australia (FBAA) had originally predicted that all the majors would move once the first went. He said he was “pleased” that he was wrong.
He added, “The decision by NAB to stand out from the crowd is a great step and shows strong support for its 900,000 plus customers. Thank you to NAB for bucking the trend.
“The decisions by the ANZ and CBA to follow Westpac were as predictable as they were unnecessary, and their existing customers should be complaining loudly and demanding better.
“I have also noted calls by some politicians for borrowers to refinance. The problem is most are trapped in a mortgage prison, unable to refinance to a lower interest rate or to do renovations or the like with their existing lender due to changed lending criteria by banks. That’s where brokers can assist by searching for the best deals.”
Sally Tindall, research director at RateCity.com.au, was also positive about the news, saying it saw NAB once again ‘breaking up’ with the other three majors.
She added, “[NAB’s] announcement is exactly what home owners need. NAB has heard the complaints from the government, regulators and most importantly their customers, and has acted.
“It’s great to see a bank putting its customers ahead of its profit margins. [The] move benefits almost one million NAB customers and potentially even more if people choose to switch to NAB.”