Last to fall: NAB hikes home loan rates, here’s how it stacks up to the other big banks

Ceyda Erem

24 Jan 2019

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After being the only big 4 bank to resist a rate hike in September, NAB has today announced a home loan rate rise for both owner occupiers and investor home loans on the Tailored Home Loan.

The change is effective as of January 31 and sees hikes of up to 16 basis points.

According to NAB Chief Consumer Officer, Mike Baird, the decision was not an easy one, struggling to uphold a balance between rewarding customer loyalty and responding to increases in funding costs.

“Our decision to hold our Standard Variable Rate since September last year, the only major Australian bank to do so, has led to around $70 million remaining in the households of more than 930,000 NAB customers,” Baird said.

Mozo Data Manager Peter Marshall said the rate rise from NAB was no surprise.

“Given that NAB was the only big bank not to raise rates in September last year, and considering that it has to think about the same finding pressures that other lenders have cited while increasing rates, it was really only a matter of time before this happened,” he said.

The rate changes are as follows:

- Owner Occupier Principal and Interest, now 5.36% (+12 basis points)

- Investor Principal and Interest, now 5.96% (+16 basis points)

- Owner Occupier Interest Only, now 5.93% (+16 basis points)

- Investor Interest Only, now 6.25 (+16 basis points)

For an owner-occupier making principal and interest repayments, on a packaged loan of $400,000 over 30 years, the changes mean $28 a month more in monthly repayments than the previous rate or $10,238 more interest over the life of the loan.

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Baird went onto explain that NAB has already begun contacting loyal customers, reassuring them that the bank would be willing to offer a repayment holiday, should they need it.

“Through these check ins we’ve advised more than 100,000 customers that they’re ahead on their repayments which gives them flexibility to take a breather on payments if they ever need it,” he said.

“We’ve also helped almost 200,000 customers understand how they can save more on interest by setting up an offset account.”

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“It’s nice to see NAB taking steps to minimise the impact on existing customers, but for new borrowers, looking outside the big banks at challenger lenders is probably going to mean getting a better deal,” Marshall commented.

The change in rates brings NAB in line with other big banks, which all offer comparable loans with interest rates between 5.36% and 5.38%.

Comparable big bank mortgage rates 

NAB Tailored Home Loan

5.36% (5.49% comparison rate*)

ANZ Standard Variable Rate

5.36% (5.46% comparison rate*)

Westpac Rocket Repay Home Loan

5.38% (5.52% comparison rate*)

CommBank Standard Variable Rate

 5.37% (5.52% comparison rate*)

All loans are ongoing basic variable rates, for owner-occupiers making P&I repayments.

For big bank customers who are looking for a better home loan deal, or new borrowers exploring their options, there are heaps of home loans available from lenders outside the big banks. Check out some hot offers in our home loan comparison table.

5 home loan offers - rates updated daily

  • Promoted

    loans.com.au

    3.03% p.a.

    3.05% p.a.

    $1234

    Product details Close details
    Smart Home Loan

    A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount, Limited time only.

    • 3.03% p.a.

    • 3.05% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Home Loan

  • Promoted

    UBank

    3.09% p.a.

    3.09% p.a.

    $1234

    Product details Close details
    UHomeLoan - Discount Offer

    One of Australia's leading digital banks. Easy & fast to apply. Free redraw with flexible repayments. Min. 20% deposit required. Low rate and no bank fees (on variable loans). Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category.^

    • 3.09% p.a.

    • 3.09% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $200,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the UHomeLoan - Discount Offer

  • Promoted

    Well Home Loans

    2.97% p.a.

    2.99% p.a.

    $1234

    Product details Close details
    Well Balanced

    Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed. Best New Home Loan in Mozo Experts Choice Awards 2019.^

    • 2.97% p.a.

    • 2.99% p.a.

    • $785

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • Optional - $10 per month

    • 80.00%

    • $200,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Well Balanced

  • Promoted

    Homestar

    2.99% p.a.

    3.02% p.a.

    $1234

    Product details Close details
    Star Essentials Home Loan

    One of the lowest home loan rate in town packed with essential features. No application or ongoing fees. Unlimited additional repayments with free online redraws. Min. loan size $150k, no construction loan.

    • 2.99% p.a.

    • 3.02% p.a.

    • $596

    • $0.00

    • $535.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $150,000

    • $850,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Star Essentials Home Loan

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

Mozo may receive advertising fees from the financial institutions, issuers of financial or credit products and third party advice providers that are shown on this page. These fees are based on a cost per click, cost per acquisition, or a fixed fee.