NAB will not rule out higher interest rates

National Australia Bank (NAB) is to review its low mortgage rates before the Reserve Bank meets again in February, making it possible NAB will raise interest rates, the Australian reports.

Of the major banks, NAB was the only one to follow the RBA’s 25 basis points increase in interest rates last week, compared with Westpac’s 45 basis point rise, Commonwealth’s 37 point increase and ANZ’s 35 basis points rise.

Such varied rates have encouraged bank customers to compare home loans. The newspaper reported that NAB has been placing staff outside Westpac’s flagship branch in Martin Place, Sydney, in an attempt to attract Westpac customers to its standard variable mortgage rate of 6.49 per cent.

NAB retail banking group executive Warren Shaw said the bank would review rates in the next few months but that it was currently happy with keeping rates comparatively low.

"We have the capacity to deal with as many customers as want to do business with us. This is not just about home loans, it’s credit cards . . . all financial services. We are comfortable with the pricing point and will be comfortable with that well into the new year," Mr Shaw told the news provider.

The recent Westpac-Melbourne Institute index of consumer sentiment recorded a dip in consumer confidence in December following the interest rate rises.

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