NAB becomes third of big four to pass on RBA cash rate cut

NAB has become the third of the big four banks to pass on the Reserve Bank of Australia’s rate cut, reducing its standard variable home loan rate by 0.25% to 5.63%.

The rate reduction is NAB’s lowest standard variable rate in nearly 40 years, with the average customer saving $62.50 a month in interest compared to repayments under the old rate.

The big bank will also reduce its rate on standard variable business lending products by 0.25%.

The rate cut is in response to the RBA’s decision to reduce the cash rate for the first time in 17 months, slashing the cash rate from 2.5% to 2.25% at its meeting on Tuesday.

Shortly after the RBA announced the change, smaller lenders ME Bank, ING Direct, Bank of Queensland, Maitland Mutual and Newcastle Permanent all passed on the full rate cut to their customers.

The Commonwealth Bank was the first of the big four to pass on the rate cut, reducing its Standard Variable Rate from 5.90% to 5.65% (effective 20 February). It was followed by Westpac, who reduced its home loan standard variable interest rate by 0.28% to 5.70% (also effective 20 February). However, ANZ is the last of the big four, yet to announce a rate cut.

Group Executive of Westpac Retail and Business Banking Jason Yetton said the rate reduction makes the bank’s standard variable rate the lowest it has been in six years, helping customers achieve home ownership.

“The smart use of an offset account combined with lower interest rates including today’s cut will help our customers realise their dream of home ownership a lot sooner.”

Want to see if your bank has passed on the cut? Find out here.