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Variable home loan competition heats up as NAB cuts to 2.19%

Variable home loan competition heats up as NAB cuts to 2.19%

Competition in the variable home loan space is heating up, as NAB trims its base variable rate by 0.10 per cent – but only for new owner-occupiers.

NAB’s lowest variable rate is now 2.19 per cent, which puts it in line with big four bank competitors, Westpac and ANZ.

However, NAB is offering this rate for customers with 20 per cent deposits, unlike Westpac and ANZ, which require 30 per cent or greater deposits.

Big four bank lowest variable rates

BankBasic variableMin LVR required
CBA

2.29%

70%

Westpac

2.19%

70%

NAB

2.19%

80%

ANZ

2.19%

70%

Source: RateCity.com.au.

NAB hikes fixed rates for sixth time in six months

NAB has also today increased its fixed rates by up to 0.50 per cent for owner-occupiers and investors.

This is the sixth time NAB has hiked fixed rates in six months, and the second time this year.

As a result of today’s changes, NAB has only one fixed rate under 3 per cent, at 2.74 per cent for 1 year.

NAB home loan rate changes for owner-occupiers – contact us for investor changes

Rate typeOld rateNew rateChangeRepayment difference $500k
Variable

2.29%

2.19%

-0.10%

-$15

1-yr fixed

2.64%

2.74%

+0.10%

$26

2-yr fixed

2.89%

3.09%

+0.20%

$54

3-yr fixed

3.34%

3.59%

+0.25%

$70

4-yr fixed

3.54%

3.99%

+0.45%

$128

5-yr fixed

3.69%

4.19%

+0.50%

$144

Note: Above rates are for owner-occupiers paying principal and interest on a package rate. Monthly repayments are on a $500K loan over 30 years.

RateCity.com.au database analysis:

  • 69 variable rate loans under 2%.
  • Average big four bank basic variable rate has dropped by 0.35% in the last year.
  • 9 fixed rates under 2% for owner-occupiers (8 fixed for 1-year, 1 fixed for 2-years).
  • 219 fixed rates under 2.5% for owner-occupiers.
  • Average big four bank 3-year fixed rate for owner-occupiers has risen 1.43% since October.
  • Since October last year Westpac has hiked fixed rates 7 times, CBA and NAB 6 times and ANZ 5 times.

RateCity.com.au research director, Sally Tindall, said: “While fixed rates are rising rapidly, there is still plenty of competition in the variable home loan market.”

“NAB has bowed to the pressure and cut its basic variable rate to match its big bank competitors Westpac and ANZ,” she said.

“Despite no change from the RBA, we’ve seen the average big four bank basic variable rate drop by 0.35 per cent in the last year, but only for new customers.

“For anyone on a variable rate, now is the time to haggle with your lender before the predicted RBA rate hikes begin,” she said.

The latest ABS data shows new borrowers are returning to variable loans, with 66 per cent of new loans settled in January on a variable rate. See graph below.

“With the majority of fixed rates from the big four now starting with a ‘3’ or higher, it’s no surprise to see borrowers opt for lower variable rates,” she said.

Screen Shot 2022-03-09 at 3.51.14 pm

Source: Australian Bureau of Statistics, Lending Indicators January 2022, released 1 March. Percentages include internal and external refinancing, in original terms.

Lowest big four bank owner-occupier home loan rates

Rate typeCBAWestpacNABANZ
Variable

2.29%

2.19%

2.19%

2.19%

1-yr fixed

2.79%

2.69%

2.74%

2.69%

2-yr fixed

2.99%

2.89%

3.09%

3.09%

3-yr fixed

3.49%

3.44%

3.59%

3.59%

4-yr fixed

3.69%

3.69%

3.99%

3.99%

5-yr fixed

3.99%

3.99%

4.19%

4.19%

Source: RateCity.com.au. Note: Some loan-to-value ratio requirements apply.

Lowest rates on RateCity.com.au

Rate typeLenderAdvertised rate
1-yr fixedUnity Bank

1.84%

2-yr fixedGeelong Bank

1.99%

3-yr fixedGeelong Bank

2.39%

4-yr fixedG&C Mutual Bank

2.89%

5-yr fixedG&C Mutual Bank

2.89%

VariableReduce Home Loans

1.77%

Source: RateCity.com.au. Note rates are for owner-occupiers paying principal and interest. Some LVR requirements apply.

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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