Add CategoryNAB has slashed more home loan interest rates below 6.00% p.a., offering homebuyers and refinancers new opportunities for savings.
NAB slashed the advertised rates on some of its Tailored Home Loan products on Monday, making it the first of the big four banks to cut interest rates in 2024.
It's a positive sign that those behind the major brands expect interest rates to drop in the coming years.
Eligible homebuyers and refinancers signing onto the NAB product for a three-year fixed rate period can now realise the lowest advertised rate of any mortgage in any of the big four banks' line up: 5.99% p.a.
To be eligible for that rate, a borrower must be an owner-occupier making principal and interest repayments with a loan-to-value (LVR) ratio of 70% or less.
Changes implemented are as follows:
| Product | LVR | Change | New rate (p.a.) | Comparison rate* (p.a.) |
|---|---|---|---|---|
| NAB Tailored Home Loan Three years fixed |
≤60% | -60bp | 5.99% | 6.64% |
| NAB Tailored Home Loan Three years fixed |
60-70% | -60bp | 5.99% | 6.64% |
| NAB Tailored Home Loan Three years fixed |
70-80% | -60bp | 6.04% | 6.80% |
| NAB Tailored Home Loan Three years fixed |
≥80% | -60bp | 6.04% | 6.80% |
The new rates compare favourably to the 5.99% p.a. interest rate (7.86% p.a. comparison rate*) advertised for borrowers agreeing on a three-year fixed rate period with NAB's Choice Package, principal and interest home loan – previously the lowest rate in NAB's mortgage suite.
How do NAB's new fixed rates compare to other big four banks'?
After NAB, the lowest fixed rate from another big four bank is advertised by Westpac.
It promises a rate of 6.49% p.a. (comparison rate* 7.57% p.a.) for those with LVRs of up to 70% committing to a two-year fixed rate period and signing onto its Premier Advantage Package.
Meanwhile, 6.59% p.a. is the lowest fixed rate advertised by both CommBank and ANZ.
While such rates might be enticing, the market is still shying away from fixed interest rates.
Fixed rate mortgages made up just 1.8% of the $56.8 billion of home loan lending occurring in May, according to Australian Bureau of Statistics figures.
Which big four bank offers the lowest variable interest rate?
With that in mind, which of the big four banks are currently advertising the lowest-rate variable home loans for owner occupiers making principal and interest repayments? Here's how the quartet's variable rates compare to one another's:
| Bank | Product with the lowest variable rate | LVR | Advertised interest rate (p.a.) | Comparison rate* (p.a.) |
|---|---|---|---|---|
| CommBank | Digi Home Loan | ≤60% | 6.15% | 6.28% |
| Westpac | Basic Variable Home Loan (special offer) | ≤70% | 6.44% | 6.76% |
| ANZ | Simplicity PLUS home loan | ≤60% | 6.54% | 6.54% |
| NAB | Tailored Home Loan | ≤60% | 6.79% | 6.87% |
Interest rates correct at the time of writing
Top variable home loan rates on the market right now
Check out some of the top rates offered by all lenders, big four bank or not, right now:
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $2,408 | Principal & Interest | Variable | $0 | $530 | 90% | |||||||||
5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | |||||||||
6.14% p.a. | 6.39% p.a. | $2,434 | Principal & Interest | Variable | $248 | $350 | 70% | |||||||||
6.14% p.a. | 6.19% p.a. | $2,434 | Principal & Interest | Variable | $0 | $595 | 70% | |||||||||
6.14% p.a. | 6.17% p.a. | $2,434 | Principal & Interest | Variable | $0 | $799 | 80% | |||||||||
6.09% p.a. | 6.11% p.a. | $2,421 | Principal & Interest | Variable | $0 | $250 | 60% |
Important Information and Comparison Rate Warning
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .
Where does NAB believe the RBA cash rate will go from here
If you were to have time travelled from the year 2020 and landed on this article, you'd be shocked at the height of the interest rates listed above.
It was nearly four years ago that the RBA cash rate – a major influence on lenders' interest rates – was dropped to a record low of 0.1%.
It has since roared to a 12-year high of 4.35% and, out of the big four banks, NAB is the most sceptical of near-term rate cuts.
It isn't forecasting a cash rate cut until May 2025.
From then, it expects the cash rate will fall once each quarter to reach 3.10% in mid-2026.
That's in contrast to CommBank and Westpac, each forecasting a cash rate cut in November, and ANZ which is tipping a February 2025 cut.
Image by Bidgee on Wikimedia Commons