NAB joins CommBank, ANZ, Westpac in hiking variable mortgage rates

NAB joins CommBank, ANZ, Westpac in hiking variable mortgage rates

NAB has finally joined its big four rivals in hiking variable mortgage rates.

NAB had for months resisted following Commonwealth Bank, Westpac and ANZ in imposing out-of-cycle rate hikes — citing a desire to reward customer loyalty and build trust — but on Thursday said it was raising standard variable rates for both owner-occupiers and investors.

NAB consumer boss Mike Baird said NAB was balancing those aims with the need to satisfy shareholders and respond to increased funding costs.

The move will add $22 per month to the principal and interest repayments on a $300,000 owner-occupier home loan over a 30-year term.

“Our decision to hold our standard variable rate since September last year, the only major Australian bank to do so, has led to around $70 million remaining in the households of more than 930,000 NAB customers,” the former NSW premier said.

“We wanted to reward our existing customers for their loyalty and held off as long as we could despite being subject to the same increasing wholesale funding costs and market pressures as other major lenders.

“We have been deliberate in our approach to limit the impact on owner occupier borrowers by keeping their rates as low as possible to encourage both new and existing customers to pay down their loan sooner.”

Westpac sparked the round of rate increases in August, citing funding pressures even though the Reserve Bank has kept the cash rate at a record low 1.5 per cent since August 2016.

NAB will from next Thursday raise its standard variable rate for owner-occupiers repaying principal and interest by 0.12 percentage points to 5.36 per cent. Its owner-occupier interest-only rate and all investor rates will rise by 0.16 percentage points.

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