Third major bank increases variable rates

by Julia Corderoy23 Oct 2015
NAB has become the third major bank to increase variable rates on owner-occupied and investment home loans.

Following moves from Westpac and CBA, the major bank has announced it will increase the interest rate on all new and existing variable rate home loans by 0.17% to 5.60%, effective Thursday, 12 November 2015.

Like the announcements from Westpac and CBA, NAB’s announcement says it is responding to market conditions, as well as regulatory changes that require NAB to increase the amount of capital applied to residential mortgages.

“There are a range of factors that come into consideration in interest rate decisions. The home loan market is dynamic, with multiple changes being seen across the industry,” NAB group executive for personal banking Gavin Slater said.

“Regulatory changes on capital requirements also increase the costs associated with providing home loans. In May this year, NAB took early steps to strengthen our capital position by raising $5.5 billion to begin to address expected changes in capital requirements.

“Today’s decision has not been easy, but we believe this is right decision for the long term. We know we have to balance the interests of our customers with the needs of our more than 550,000 shareholders.

“Interest rates are at historically low levels and NAB remains committed to providing a competitive proposition for our customers.

“We appreciate that price is important, but we also know that customers want us to provide the right help and advice, the right products, and deliver innovative digital capability.”

However, according to the major bank, there are no changes to fixed rates, with NAB having cut its two, three and four-year fixed home loan rates earlier this year.


  • by Gerald Smith-Jomes-Brown 23/10/2015 11:37:56 AM

    Why do we act surprised? They always take turns to be the first with the bad news, alternating as to which one of the four comes out first. Wonder which one it will be next time.
    They all fall into line one after the other!

  • by GC 23/10/2015 11:51:31 AM

    This is absolute BS. The 2015 yr end has shown the banks are making massive net annual profits - more than enough to set aside funds to cover unforeseen contingencies. This is just a cash grab. Its about bloody time the banks looked after the ones who make them rich... US.

    2015 cash profits (in billions) of the banks were WBC: $3.778, ANZ: $3.676, CBA: $4.623 & NAB: $3.3208.

    Given the GFC was 7 bloody years ago I would say Australian banks have fared quite well. The Basil requirements have been around for many years and the banks have been required to set aside funds because of the GFC issues - and they have been. Between APRA and the banks BS we are headed for some serious gouging.

    This is exactly the same as the BS arguments we copped previously of "it's the cost of funds" for the rate increases. Now the BS we will be told is "APRA made us do it".

    I am all for our banks to make a profit. If they dont, then we dont have banks. But this is crap. APRA, get your head out of your arse and start making good decisions based on reality and not your idiotic & BS presumptions.

    Australians deserve better than this garbage.