NAB hikes fixed rates on home loans–again

NAB atms

NAB is the latest bank to make changes across its range of fixed rate home loans, lifting rates by as many as 50 basis points. 

This marks the second rate-hike from NAB this year – but they’re far from the only offenders. Banks have been urgently pushing fixed rates back up to pre-pandemic levels in light of growing speculation the RBA may soon raise the cash rate.  

The table below shows the new fixed rates on the NAB Tailored Home Loan (Choice Package) for owner occupiers making P&I repayments:

NAB Tailored Home Loan Choice Package — 9 March 2022

TermIncreaseCurrent Rate
1-year10bp2.74% p.a. (4.21% p.a. comparison rate*)
2-year20bp
3.09% p.a. (4.18% p.a. comparison rate*)
3-year25bp3.59% p.a. (4.24% p.a. comparison rate*)
4-year45bp3.99% p.a. (4.35% p.a. comparison rate*)
5-year50bp4.19% p.a. (4.43% p.a. comparison rate*)

These rates now represent NAB’s most affordable fixed-rate option. 

At the same time, NAB has also cut its variable interest home loans. Their Base Variable Rate Home Loan for owner occupiers with an LVR below 80% is now down 10bp to 2.19% p.a. (2.23% p.a. comparison rate*). 

During the last few months of soaring fixed-rates, banks have used variable rate drops as part of their playbook to reel in customers.

As a result, for prospective home buyers the current low variable rates look like the more enticing offer. However, with the RBA poised to drive up cash rates in the near future, fixed-rate home loans might be the cheapest option in the long run.

Why are fixed-rates going up?

There are a couple reasons why Australian banks have been upping their fixed rates lately.

Firstly, the RBA looms large with impending changes to the cash rate, which many Australian economists reckon could jump a few times by the end of the year to offset inflation. Raising the cash rate is not an absolute guarantee that variable interest rates will rise, too, but banks may be adjusting their funding models accordingly.

Secondly, the RBA’s term funding facility – which made a large sum available to banks at a low capped rate – was retired in June 2021. Banks had drawn down more than they needed, so that lasted beyond the facility’s expiration date. As such, they have kept their own rates low until now to entice customers.

Finally, economic inflation in other countries (especially the US) has put enormous pressure on Australian banks who get part of their funding from overseas. Since banks have to pay more on their own funds now, they’re hiking rates on customers to compensate. 

All things up, fixed-rates will likely become even more expensive in the coming months. But with variable rates poised to overtake them by 2023, now may be a great time to jump at the opportunity.

If you’re considering buying a home, head over to our fixed rate comparison tool to get started. 

We’ve also rounded up the property trends to watch out for in 2022, as well as a new guide to off-market buying for those seeking a competitive edge.

Compare and save on fixed-rate home loans - last updated 13 August 2022

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    4.49% p.a.
    fixed 1 year
    3.81% p.a.

    No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.

    Details
  • Fixed Rate Home Loan

    Home Loan Package, Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    5.57% p.a.
    fixed 1 year
    4.03% p.a.

    Ability to split your home loan between Fixed and Variable. Dedicated Relationship Manager. Min 20% deposit. Receive $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 31 August 2022 and settle by 31 October 2022.

    Details
  • Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR 70-80%

    interest rate
    comparison rate
    Initial monthly repayment
    4.55% p.a.
    fixed 1 year
    3.91% p.a.

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

    Details
  • Mozo Expert Choice Badge
    Fixed Rate Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    4.99% p.a.
    fixed 1 year
    3.63% p.a.

    Competitive fixed rates across 1 to 5 year terms. No application fee or annual fee. Free extra repayments (up to $10,000 per year). Winner of Australia's Best Large Mutual Bank 2022.

    Details

* 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 $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. 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.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.