NAB slices 0.40% off variable rate home loan, jumps the gun on RBA
The Reserve Bank of Australia (RBA) might not have moved on interest rates this month, but NAB has jumped the gun by dropping one of its variable rate home loans.
NAB has sliced 0.40% off its Base Variable Rate Home Loan, bringing its interest rate down to 6.44% p.a. (6.48% p.a. comparison rate*).
These new variable rates are available to new owner occupiers who will be paying principal and interest, and you only need a deposit as little as 5% to qualify.
What’s behind NAB’s move?
With NAB shifting on variable rates ahead of the RBA, Mozo’s personal finance expert, Rachel Wastell says this could be NAB’s response to intense competition among the Big Four banks, two of which are offering low rate digital-only home loans for borrowers.
“Today’s cuts look to be a strategic move from NAB, making it more competitive with the digital-only offers launched by CommBank and ANZ Plus, while still offering borrowers the benefit of in-person service,” says Wastell.
“For new NAB customers with a $500,000 loan, today’s cut means a reduction of $126 on monthly repayments, which is a substantial sized reduction in lieu of an RBA rate cut.”
How does NAB measure up to other Big Four banks?
When we look at the leading rates from the Big Four banks in the Mozo database, the top two are digital-only options with no access to in-person banking.
ANZ’s digital-only brand, ANZ Plus, comes in first with a variable rate of 6.14% p.a. – though this option is only available to those who are refinancing their home loan.
Commonwealth Bank’s Digi Home Loan is close behind with a rate of 6.19% p.a., which again is only available for refinancers.
Following the cut to its basic variable rate home loan, NAB’s new rate of 6.44% p.a. is the lowest of the Big Four that doesn’t require refinancing and allows for in-person banking.
Here’s a look at the lowest variable rates among the Big Four, as at 14 November, 2024.
| Lender | Home loan | Variable rate (p.a.) | Comparison rate (p.a.) |
| ANZ Plus | Home Loan Variable (Refinance) | 6.14% | 6.15% |
| Commonwealth Bank | Digi Home Loan | 6.19% | 6.32% |
| NAB | Base Variable Home Loan | 6.44% | 6.48% |
| Commonwealth Bank | Standard Variable Rate (Wealth Package) | 6.49% | 6.86% |
| Westpac | Flexi First Option Home Loan | 6.54% for 24 months (then 6.94%) | 6.86% |
| ANZ | Simplicity Plus Special Offer | 6.64% | 6.64% |
| Source: Mozo.com.au as at 14 November 2024, leading Big 4 variable rates for owner occupier, principal & interest home loans at $500,000, 80% LVR. | |||
What to do if you’re with NAB
The new rate on NAB’s basic variable home loan is officially only available to new borrowers, but Wastell encourages existing customers to get in touch with the lender.
"For existing customers, it’s a good reason to pick up the phone and call NAB to see if they can get the same rate cut before Christmas,” she says.
It’s worth remembering that lower rates are also available from lenders outside of the Big Four, so it could be a good time to compare home loans and get a better understanding of what your options are for a lower rate.
* 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. You can change the loan amount and term in the input boxes at the top of this table. 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.
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