NAB will increase its variable rates on new and existing residential investor home loans by 0.15% per annum, effective from Monday 12 December 2016.

This will mean NAB’s Variable Rate for Residential Investment Home Loans will be 5.55% per annum.

There is no change to NAB’s Variable Rate for Home Loans (Standard Variable Rate) for owner occupier customers, which remains at 5.25% p.a.

NAB Chief Operating Officer, Antony Cahill, said NAB takes a disciplined approach to managing its entire portfolio, and needs to make adjustments to ensure it continues to lend responsibly and sustainably to all customers.

“We don’t make these decisions lightly, and these changes reflect the increasingly challenging environment we are currently operating in as we seek to meet the needs of all our customers and our shareholders,” Mr Cahill said.

“As was evident during the recent bank reporting season, net interest margins – the difference between what we pay to borrow funds to lend to our customers and what our customers pay – are down, particularly in home lending, and they remain under pressure.

“A low-rate environment poses considerable challenges to all lenders, and we must respond to what is happening in the economy and the market. In doing so, we have to consider a range of factors including the ongoing need to hold longer-term stable sources of funding, continued elevated funding costs, regulatory requirements, and the competitive pressures at play.

“We will continue to regularly review our products and pricing, and make decisions that enable us to achieve a balance for all stakeholders – borrowers wanting to buy a home or grow their business, depositors and investors seeking a return on their investment, and our shareholders who rely on our dividends.”

Earlier this year, NAB made changes to the way it prices its home loans based on loan purpose and repayment type.

“We can now be more specific in how we manage our entire home lending portfolio in line with economic conditions and regulatory requirements,” Mr Cahill said.

He said the investor segment continues to be important to NAB, and interest rates for all home buyers are around their lowest levels in more than 50 years.

“NAB is committed to providing customers with great value and service, and home loan products that suit their needs at a competitive price,” Mr Cahill said.

NAB continues to offer highly competitive fixed rate terms, and borrowers seeking certainty about their repayments may want to consider fixing part or all of their home loan.

“Switching to a fixed rate loan is a straightforward and easy process, and I encourage borrowers to speak with their banker or broker to find out more about what’s available, and if a fixed rate home loan might be right for their circumstances.

“We’re here to help our customers as they make choices about which product may best suit their needs,” Mr Cahill said.

Conditions, fees and eligibility criteria apply to NAB’s products. Customers who want to know more about these changes are encouraged to contact their banker about what works best for them.

Notes to Editor:

From Monday 12 December 2016, NAB’s advertised indicator rates for home lending will include:

NAB will also increase the variable rate for NAB Homeplus Residential Investment Home Loans, available through NAB Broker, by 0.15% p.a., to 5.58% p.a., effective from Monday 12 December 2016.