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NAB caves to funding pressures
NAB’s decision to hike rates is a long-awaited blow for its variable rate customers.
Yesterday’s announcement comes 136 days after they said they were keeping their variable rates on hold.
NAB is lifting rates by 0.12 per cent for owner occupiers paying principal and interest, and 0.16 per cent for investors and interest only customers, effective 31 January 2019.
As a result, the average NAB customer on a discounted variable rate will now pay $25 extra per month, which translates to almost $300 annually.
RateCity.com.au research director Sally Tindall said that while NAB held out far longer than the others, their customers will still be disappointed with today’s news.
“NAB tried to put their customers first, but it appears profit has won out in the end,” she said.
“NAB’s previous decision to keep rates on hold was designed to win back the trust of their customers. It was also a play to get new customers in the door.
“The strategy appears to have worked. In October 2018, NAB surpassed ANZ in terms of home loan market share. They now have the third largest home loan book, according to APRA data.
“Already this year we’ve seen BoQ and Virgin Money hike rates due to cost of funding pressures. Now that NAB has hiked as well, others are likely to follow in its shadow,” she said.
Big four banks – how they compare
| Bank | Standard variable rate |
|---|---|
| ANZ | 5.36% |
| CBA | 5.37% |
| NAB | 5.36%* |
| Westpac | 5.38% |
Based on their owner occupier rates, paying principal and interest. * From 31 January
NAB discounted variable rate
| Loan Amount | Old Rate | New Rate | Monthly Difference | Annual Difference |
|---|---|---|---|---|
| $350,000 | 4.36% | 4.51% | $25 | $299 |
| $500,000 | 4.39% | 4.51% | $36 | $427 |
| $1,000,000 | 4.34% | 4.46% | $71 | $851 |
NAB standard variable rate
| Loan Amount | Old Rate | New Rate | Monthly Difference | Annual Difference |
|---|---|---|---|---|
| $350,000 | 5.24% | 5.36% | $26 | $313 |
| $500,000 | 5.24% | 5.36% | $37 | $447 |
| $1,000,000 | 5.24% | 5.36% | $75 | $894 |
The above tables are based on rates for owner occupiers paying principal and interest.
Disclaimer
This article is over two years old, last updated on January 25, 2019. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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