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

Ceyda Erem

24 Jan 2019

redactor/hero-images/612/NAB_content.jpg

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.

RELATED: Why smart Aussies are dumping old bank loans

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.”

RELATED: Is now the right time to fix your home loan?

“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

    Macquarie

    2.54% p.a.

    2.81% p.a.

    $1234

    Product details Close details
    Offset Home Loan Package

    Handy offset account to help pay your home loan off sooner. Up to 10 offset accounts per loan account available. Fee free access at ATMs. Waived credit card annual fee. $0 international purchase fees.

    • 2.54% p.a.

    • 2.81% p.a.

    • $0

    • $248.00 yearly

    • $400.00

    • yes - free

    • yes - free

    • yes

    • 70.00%

    • $0

    • $150,000

    • $5,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Monthly

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

  • Promoted

    loans.com.au

    2.48% p.a.

    2.50% p.a.

    $1234

    Product details Close details
    Smart Home Loan 80

    A low-rate home loan that could save you thousands, with no ongoing fees plus unlimited extra repayments and free redraws. Mozo Experts Choice Low Cost Home Loan 2020.^ You'll need to be borrowing $1 million or less and have at least a 20% deposit required.

    • 2.48% p.a.

    • 2.50% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • 80.00%

    • $520

    • $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 80

  • Promoted

    HSBC

    2.59% p.a.

    2.60% p.a.

    $1234

    Product details Close details
    Home Value Loan

    No ongoing fees. Free extra repayments and online redraw. Mozo Experts Choice Split Home Loan 2020^

    • 2.59% p.a.

    • 2.60% p.a.

    • $150

    • $0.00

    • $300.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $150

    • $50,000

    • $7,500,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

  • Promoted

    Athena

    2.34% p.a.

    2.34% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^

    • 2.34% p.a.

    • 2.34% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 60.00%

    • $0

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Celebrate Variable Home Loan

  • Promoted

    Homestar

    2.29% p.a.

    2.32% p.a.

    $1234

    Product details Close details
    Star Essentials Home Loan

    Low Cost Home Loan 2020 winner.^ A home loan packed with all the essentials and offering up to $1500 cashback and no ongoing fees. No Construction loans.

    • 2.29% p.a.

    • 2.32% p.a.

    • $515

    • $0.00

    • $535.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $515

    • $150,000

    • $850,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • Refinances receive up to $1,500 cashback or upfront fees waived on purchases for applications received by 31 October 2020 and settled by 31 January 2021.

    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.