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

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 

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.