No relief for borrowers yet: NAB raises rates on fixed interest-only loans
While all eyes are on the 2017 Budget announcement, NAB has once again raised interest rates on its interest-only fixed rate home loans.
While the big bank actually cut rates on some principal and interest loans for owner occupiers - fixed terms of two and three years were reduced by between 0.05% and 0.31% - the vast majority of changes were rate hikes.
On the former, 1 year fixed terms saw the biggest increases, of between 0.10% and 0.50%, while 2 year terms weren’t far behind, with hikes ranging from 0.20% to 0.41%. For terms of 3, 4 and 5 years, increases ranged from 0.10% to 0.30%.
Portfolio Facility loans increased by 0.16% for fixed terms 1-5 years, except the 2 year term, which increased by 0.27%.
NAB interest only fixed rate increases
Lenders have been hiking rates on interest only loans lately in response to tightened lending standards set out by APRA. But lending figures are remaining strong, thanks to a high-demand housing market, so in reality, the banks are set to make a tidy profit from rate increases.
NAB’s latest rate rises come less than a week after it announced a cash profit of $3.29 billion - a 2.3% boost from its last half year results.
For borrowers looking to lock in a rate on their home loan, the good news is that there are still plenty of low rate options available. Head over to our fixed rate mortgage comparison table to find some of the best offers around.