NAB raises home loan variable interest rates
National Australia Bank has announced it will raise variable home loan interest rates for owner-occupiers by 12% as early as January 31.
NAB announced it will raise variable home loan interest rates for owner-occupiers by 12% per annum, from Thursday 31 January.
Owner-occupier interest rates were previously advertised at 5.24% and have gone up to 5.36%, while owner occupier interest only rates have jumped 16% to 5.93% per annum.
NAB chief customer officer, Mike Baird has said the decision to increase rates was not taken lightly, as the bank sought to achieve the right balance between rewarding customer loyalty, shareholder outcomes, and responding to sustained increases in funding costs.
The hike comes after NAB last September announced it would hold its standard variable rate “ to recognise and reward its existing customers ” after the other big four banks lifted their rates within a few days of each other.
NAB chose to not increase rates despite analysts’ predictions and has not hiked rates since March 2017.
'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,' Mr Baird said.
What are the changes?
According to NAB, based on a $300,000 home loan over a 30-year term:
• NAB owner occupier customers with a standard variable rate home loan will pay $22 more each month on their principal and interest repayments, working out to be $264 per year.
• NAB customers with an owner-occupier interest only variable rate home loan will pay an extra $40 per month on their home loan repayments, working out to be a total of $480 each year.
• NAB customers with a residential investor principal and interest variable rate home loan will pay an additional $31 each month on their principal and interest repayments, and $372 each year.
• NAB customers with a residential investor interest only variable rate home loan will pay $40 more each month on their home loan repayments, adding up to $480 each year.
However, the changes do not impact NAB’s fixed home loan rates, including their first home buyer special rate of 3.69% per annum, at a fixed rate for two years.
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