NAB has today announced it will reduce all variable home loan interest rates by 0.25% per annum.
NAB Chief Customer Officer – Consumer Banking, Mike Baird said that as a result the bank’s Standard Variable Rate (SVR) will be the lowest it has been in more than 40 years.
“This will save owner-occupier customers making principal and interest repayments on a $400,000 home loan about $62 per month or $744 per year, which will provide more money in household budgets for other expenses at a time when cost of living remains challenging,” Mr Baird said.
“We strongly believe reducing rates is the right thing to do by our customers and reflects our focus on earning trust in the community and rewarding our loyal existing customers.
“NAB is determined to continue supporting our home loan customers by being a bank they can rely on throughout the lifetime of their loan.”
Today’s decision follows the Reserve Bank of Australia announcing it has reduced the official cash rate by 0.25% p.a.
Mr Baird added the circumstances of each RBA cash rate decision will always vary and while this has some influence on the cost of borrowing money, it is not the only funding cost driver for NAB.
“Funding costs have decreased in recent months reflecting improvements in domestic and offshore wholesale funding market conditions,” Mr Baird said.
“At the same time the difference between what we charge and how much it costs us to fund a mortgage remains under pressure, given intense competition and increasing deposit costs.
“Decisions like this are never easy and we need to consider customer, shareholder and community expectations as well as the current economic environment to strike the right balance. Reducing our variable home loan interest rates by the full 0.25% per annum is the right decision today.”
Mr Baird said NAB will continue to monitor the competitive environment to ensure its products and services represent value for both new and existing customers.
In September 2018, when many competitors increased home lending interest rates, NAB announced it would hold its SVR. The decision to hold for four months saw around $70m remain in the pockets of NAB’s customers.
From Friday 14 June 2019, NAB’s advertised Tailored Home Loan variable rates will be as follows:
|Current Advertised Rates||Advertised rate as at
Friday 14 June 2019
|Owner Occupier Principal and Interest||5.36% p.a.||5.11% p.a. (-0.25% p.a.)|
|Investor Principal and Interest||5.96% p.a.||5.71% p.a. (-0.25% p.a.)|
|Owner Occupier Interest Only||5.93% p.a.||5.68% p.a. (-0.25% p.a.)|
|Investor Interest Only||6.41% p.a.||6.16% p.a. (-0.25% p.a.)|
NAB decreased several of its fixed rates recently. Importantly, NAB’s First Home Buyer special rate of 3.49% per annum, fixed for two years announced last Thursday remains.