NAB trims base variable rate

The move heats up the competition in the variable loan space for new owner-occupiers, researcher says

NAB trims base variable rate

News

By Mina Martin

NAB has slashed 0.1% off its base variable rate, bringing the rate to 2.19% and heating up the competition in the variable home loan space – but only for new owner-occupiers.

NAB’s 2.19% variable rate puts it in line with big-four bank competitors Westpac and ANZ. But unlike Westpac and ANZ, which require 30% or greater deposits, NAB is offering the rate for customers with 20% deposits.

RateCity.com.au compiled the lowest variable rates for the big four banks:

Bank

Basic variable

LVR variable

CBA

2.29%

80%

Westpac

2.19%

70%

NAB

2.19%

80%

ANZ

2.19%

70%

NAB also upped its fixed rates for owner-occupiers and investors by up to 0.5%. This was the sixth time the bank hiked fixed rates in six months, and the second time this year.

The change resulted in NAB having only one fixed rate under 3%, at 2.47% for one year.

RateCity.com.au showed the NAB home loan rate changes for owner-occupiers:

Rate type

Old rate

New rate

change

Repayment difference $500k

Variable

2.29%

2.19%

-0.1%

-$15

one-year fixed

2.64%

2.74%

+0.1%

$26

two-year fixed

2.89%

3.09%

+0.2%

$54

three-year fixed

3.34%

3.59%

+0.25%

$70

four-year fixed

3.54%

3.99%

+0.45%

$128

five-year fixed

3.69%

4.19%

+0.5%

$144

“While fixed rates are rising rapidly, there is still plenty of competition in the variable home loan market,” said Sally Tindall, RateCity.com.au research director. “NAB has bowed to the pressure and cut its basic variable rate to match its big bank competitors Westpac and ANZ. Despite no change from the RBA, we’ve seen the average big four bank basic variable rate drop by 0.35% in the last year, but only for new customers. For anyone on a variable rate, now is the time to haggle with your lender before the predicted RBA rate hikes begin.”

According to the latest ABS data, new borrowers are shifting back to variable loans, with 66% of new loans settled in January on a variable rate.

“With the majority of fixed rates from the big four now starting with a ‘3’ or higher, it’s no surprise to see borrowers opt for lower variable rates,” Tindall said.

Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!