NAB cuts fixed rates (again) ahead of next RBA decision
NAB cut the interest rates on its fixed-rate home loan for a second time this year, as we draw closer to the first Reserve Bank of Australia (RBA) cash rate cut.
Australia’s third-largest Big Four bank was the first to break the fixed-rate stalemate back in July, with a 0.60% cut to its 3-year Tailored Home Loan (Fixed).
This rate has now been trimmed by a further 0.10%, bringing its most competitive 3-year rate to 5.94% p.a. (6.77% p.a. comparison rate*) for owner-occupiers with <80% LVR, making principal and interest repayments.
The new fixed-rates on NAB’s Tailored Home Loan are as follows:
| Fixed rate term | Interest rate | Comparison rate* | Interest rate cut |
| 1 year | 6.34% p.a. | 7.00% p.a. | -0.40% |
| 2 years | 6.09% p.a. | 6.89% p.a. | -0.55% |
| 3 years | 5.94% p.a. | 6.77% p.a. | -0.10% |
| 4 years | 6.29% p.a. | 6.81% p.a. | -0.50% |
| 5 years | 6.34% p.a. | 6.79% p.a. | -0.50% |
| Source: Mozo database, as at 8 October 2024. Rates are for an owner-occupier with <80% LVR, making principal and interest repayments over 25 years on a $400,000 home loan. | |||
Mozo finance expert, Rachel Wastell says these cuts should serve as a “wake-up call” for Aussie homeowners.
“NAB's cuts to all fixed-rate terms could be a wake-up call for homeowners sitting on the same rate for a while.
“After cutting the 3-year fixed-rate back in July, they've now cut all terms to keep these rates competitive and position themselves as a serious contender among the Big Four,” said Wastell.
Among the Big Four home loans on offer, NAB’s 3-year fixed-rate sits 5 basis points higher than CommBank’s Fixed Rate Home Loan package, but 5 basis points below Westpac’s equivalent offer, the Fixed Options Home Loan package.
Home loans from the Big Four tend to have higher interest rates. However, the recent cuts from CBA, NAB and Westpac place their most competitive home loans below the average rate in the Mozo database: 6.08% p.a. (OO, P&I, <80% LVR, $400k).
Wastell says it’s time to shop around and consider the possibility of fixing your rate.
“With fixed-rates being cut across the board, now is the time to shop around or call your lender to see if they can give you the cuts they're offering new borrowers.
“Fixing your rate can give you peace of mind, but it’s not a one-size-fits-all solution. If you’re on the fence, a split loan might be worth considering. It gives you the security of a fixed-rate on part of your loan while letting you take advantage of potential rate drops on the variable side.
“Home loan holders that take the time to compare could find themselves hundreds or even thousands of dollars better off, as even a small rate cut can save you big over time.
“It’s all about finding what works for you, so take the time to weigh up your options, and don’t just stick with what you know. See if there’s a better deal out there.”