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NAB cuts fixed home loan rates
Australia’s third largest lender, NAB, has today cut its fixed home loan rates by up to 0.65 percentage points.
This takes NAB’s lowest 3-year fixed rate down to a relatively competitive 5.89 per cent for owner-occupiers with at least 30 per cent deposit (loan-to-value ratio of 70 per cent or less).
NAB: today’s fixed rate changes
Rates are for owner-occupiers paying principal and interest (deposits of 30% or more)
Fixed term | Old rate | New rate | Change %-points |
1-year | 6.69% | 6.29% | -0.40 |
2-year | 6.59% | 6.04% | -0.55 |
3-year | 5.99% | 5.89% | -0.10 |
4-year | 6.74% | 6.24% | -0.50 |
5-year | 6.79% | 6.29% | -0.50 |
Source: RateCity.com.au
How the big four banks stack up
Today’s move brings NAB’s lowest 3-year fixed rate in line with CBA and Westpac’s lowest 3-year fixed home loans.
ANZ is the only major bank offering its lowest 3-year rate still starting with a ‘6’.
Last Thursday, Macquarie Bank slashed a range of fixed rates by up to 0.40 percentage points to 5.39 per cent.
That said, the lowest 3-year fixed rate on the RateCity.com.au database is 0.90 percentage points lower than NAB’s rate at 4.99 per cent from SWS Bank.
Big four banks: lowest advertised rates
Loan type | CBA | Westpac | NAB | ANZ |
1 year | 6.39% | 6.09% | 6.29% | 6.69% |
2 year | 6.29% | 5.89% | 6.04% | 6.54% |
3 year | 5.89% | 5.89% | 5.89% | 6.59% |
4 year | 6.29% | 5.89% | 6.24% | 6.74% |
5 year | 6.69% | 5.89% | 6.29% | 6.84% |
Variable | 6.15%* | 6.44%, 2 yrs then +0.4% pts | 6.79% | 6.14%* |
Source: RateCity.com.au. Note: rates are for owner-occupiers paying principal and interest. Deposit requirements apply. * rates are for CBA and ANZ’s digital-only home loans.
Lowest home loan rates on the RateCity.com.au database
Fixed term | Advertised rate | Lender |
1-yr | 5.50% | Geelong Bank |
2-yr | 5.39% | Macquarie |
3-yr | 4.99% | SWS Bank |
4-yr | 5.39% | Macquarie |
5-yr | 5.34% | Macquarie |
Variable | 5.75% | Abal Bank |
Source: RateCity.com.au. Note: rates are for owner-occupiers paying principal and interest. Deposit requirements apply, excludes green loans, lowest variable excludes introductory rates.
Is now a good time to fix?
Three of the major banks’ lowest advertised home loan rates are fixed rates, with CBA, Westpac and NAB all offering lower fixed options, and yet despite this, the proportion of borrowers opting for a fixed rate is at near record lows.
The latest ABS lending indicator figures show just 2.0 per cent of new and refinanced loans in August opted for a fixed rate.
This is unsurprising, with borrowers opting to stay on variable rates in anticipation of the cash rate cuts some economists predict could come as early as December this year (CBA’s economic team).
NAB’s own economic team previously predicted the first cash rate cut would come in May next year, but recently changed its forecast, now predicting the first cut will arrive in February 2025.
Proportion of loans opting for a fixed rate since the start of the RBA hikes
Source: ABS lending indicators
RateCity.com.au money editor, Laine Gordon, said: “This move brings NAB’s lowest 3-year fixed rates in line with its major bank competitors, CBA and Westpac’s lowest 3-year rates.”
“At 5.89 per cent for 3 years from a major bank, this offer from NAB is likely to get some attention. However, with the next move from the RBA almost certainly a cut, the prospect of fixing for this long is unlikely to appeal to many people,” she said.
“The popularity of fixed rates peaked back in July 2021 when 46 per cent of new and refinanced loans opted for a fixed rate, according to the ABS. This now sits at just 2.0 per cent in the most recent data.
“The RateCity.com.au database shows the lowest 3-year fixed rate is now 4.99 per cent, while the lowest variable rate is 0.76 percentage points higher at 5.75 per cent.
“Right now there’s not a huge gap between the lowest fixed and lowest variable rates, but a few cash rate cuts could paint a different picture.
“Borrowers thinking about fixing their home loan should know fixed rates are a lot less flexible, with caps on extra repayments and typically no access to an offset account.
“Short-term fixed rates can also be more work as you’ll need to renegotiate, or refinance at the end of the fixed period or risk rolling over to an uncompetitive variable rate when the fixed period expires,” she said.
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Product database updated 21 Dec, 2024
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