NAB increases variable home loan interest rates, but introduces a record low 3.69% fixed rate for first home buyers

. 2 min read

Today NAB announced a range of updates to it’s home loan interest rates.

The good news: First Home Buyers, 2 year Package Fixed Rate at 3.69%

The bad news: effective 24th March 2017 Owner occupiers will pay an extra 0.07% p.a on their variable home loan rate, while residential investors will end up paying a whopping 0.25% p.a.

NAB Announces changes to home loan interest rates

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.”

From the analysis we had conducted last year we did anticipate costs of funding to increase over 2017 and also expected that banks will continue to update mortgage rates as they did in 2016 regardless of the RBA rate decision. Increasingly residential investor borrowers will experience more pressure with a greater proportion of these home loan increases been directed towards curbing demand and balancing a profitable mortgage book.

Mr 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.

This is a disturbing number. It seems that 15% of NAB's customers are paying 5.25% - 5.55% (5.32% - 5.80% after the 24th of March) for their home loans. Whereas through LoanDolphin we have analysed thousands of rates and found that, on average, owner occupiers were able to refinance their mortgage at 3.85% and residential investment loans at 4.02%. That's over $5,000 per year in savings.

It seems that there are plenty of NAB customers who are being left in the dark about potential rate discounts they could have had.

Speaking about the market leading 3.69% rate Mr. Cahill said “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”

“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.”

We at LoanDolphin agree, no other big bank (compared to NAB, CBA and ANZ) has come up with a better-fixed rate yet. But we are expecting the competitiveness between banks will bring about some attractive offers. However, in the meantime those who want access to lending experts at their fingertips and want to secure market leading home loan rates can join our bidding platform.