National Australia Bank today announced it would cut its Standard Variable Rate by 0.20%p.a. to 5.43%p.a. – the lowest it has been since 1978.

Gavin Slater, NAB Group Executive Personal Banking, said NAB was pleased it will deliver further savings to its nearly 650,000 variable rate home loan customers with the second cut to its SVR this year.

“Today’s announcement means NAB customers with a standard variable home loan will save an average $50-a-month or $600-a-year in interest payments based on a $300,000 interest-only home loan – leaving more money in household budgets for other expenses,” he said.

Mr Slater said that in making the decision to reduce its SVR to 5.43%p.a. NAB had carefully considered the needs of customers and shareholders and the current economic and regulatory environment.

He said NAB was committed to competition and providing great value and service to customers.

“Our standard variable home loan rate is the lowest it has been in almost 40 years and NAB is also offering customers our lowest ever fixed home loan rates for one to five-year terms,” he said.

NAB’s one-year Choice package fixed rate is 4.49%p.a; two-year is 4.59%p.a; three-year is 4.69%p.a; four-year is 4.99%p.a; and, five-year is 4.59%p.a.

“These fixed rates can offer our customers a level of certainty with their repayments that will help them manage their household budget,” Mr Slater said.

NAB also announced it will reduce its rate on standard variable business rate lending products by 0.25%p.a. to help small businesses invest and grow.

Mr Slater said small businesses made up about 95 per cent of all Australian businesses, employed about 50 per cent of all workers and were critical to the Australian economy.

The new standard variable rate is effective from Wednesday, 13 May 2015.

Note to editors: Fixed rates mentioned above exclude discounts.