Big four bank changes fixed rate home loans

A major bank has decreased its one-year fixed rate for owner-occupied and investment home loans and increased its fixed-rates for longer terms, effective immediately.

From today, NAB will decrease its one-year Package Fixed Rate for Home Loans to a rate of 3.89 per cent per annum for owner occupiers (down 10 basis points) and its one-year year Package Fixed Rate for Residential Investment Home Loans to 3.99 per cent per annum (down 15 basis points).

Fixed rates for the bank's two, three and four-year Package Fixed Rate for Home Loans will increase, effective today, to 3.98 per cent, 4.09 per cent, and 4.59 per cent per annum respectively. These represent a basis point rise of 23, 20, and 60, respectively.

The fixed rate for five-year Package Fixed Rate for Home Loans remains the same at 4.59 per cent.

The Package Fixed Rate for Residential Investment Home Loans will also change, to 4.19 per cent, 4.29 per cent, 4.79 per cent, and 4.79 per cent per annum respectively.

The changes apply to new fixed rate home loans only.

“There are a range of factors that influence the funding that NAB – and all Australian banks – source, so we can provide home loans to our customers,” NAB chief operating officer, Antony Cahill, said.

“The cost of providing our fixed rate home loans has increased over recent months.”

“We continue to watch market and economic conditions to ensure we continue to lend and manage our business responsibly, so we remain strong and stable for the benefit of our customers, shareholders, and the broader economy,” Mr Cahill added.

According to Mr Cahill, fixed rate home loans "have become increasingly popular" with customers. He noted that these applications "more than doubled" as a share of total applications in December, compared to in September last year.

The bank has said that it continues to monitor the "various factors" that influence its Variable Rate for Home Loans (Standard Variable Rate) for owner occupier customers, which remains at 5.25 per cent per annum.

NAB is the latest lender to announce rate increases, after Bank AustraliaANZ, Commonwealth Bank, Suncorp, QBE, Virgin Money all announced rate hikes in the last month, as the official cash rate remains at historic lows.

Lenders have cited increased funding costs as the primary reasons for their recent mortgage repricing.

Suncorp Bank, which lifted its variable rates for new and existing property investors by 15 basis points in December, noted that funding markets have changed significantly since the US election.

[Related: CEO encourages mortgage review following rate hikes]

 

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Annie Kane

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