NAB leads home loan interest rate cuts 

Things are heating up in the home loan space ahead of a highly anticipated Reserve Bank of Australia (RBA) cash rate decision.

As speculation of a cash rate hike – a move that would drive home loan rates higher – mounts, many of the market's notable players were dropping interest rates.

The RBA board will come together in the first week of August to weigh up whether yet-to-be released inflation data is enough of a worry to warrant a rate hike.

Most experts and commentators agree that a hike is less likely than a hold, but few are willing to rule out an upwards movement.

But all that's still to come, and plenty has already happened that hopeful home loan borrowers and wishful refinancers will want to know about.

That includes the first interest rate cut from a major bank in 2024, with NAB slashing rates on certain fixed terms by up to 60 basis points.

Let's jump in.

NAB slashes fixed interest rates by 60 basis points

NAB officially has the lowest advertised interest rate of any big four bank after it cut rates offered on three-year fixed rate periods to under 6.00% p.a.

NAB's Tailored Home Loan product now offers a rate of just 5.99% p.a. for borrowers with loan-to-value ratios (LVRs) of 70% or less.

Those with LVRs of up to 80%, meanwhile, could potentially secure a rate of 6.04% for three years.

Changes made by the big bank this week included:

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%

Ubank drops variable home loan rates

Joining in on its parent company's actions was Ubank, cutting rates for investors and owner-occupiers making interest only repayments this week.

Here's what would-be borrowers need to know:

Product	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Flex Variable Interest only	<60%	-5bp	6.64%	6.58%
Flex Variable Interest only	60-80%	-5bp	6.69%	6.63%
Investment Flex Variable Principal & interest	<60%	-10bp	6.29%	6.53%
Investment Flex Variable Principal & interest	60-80%	-10bp	6.34%	6.58%

Horizon Bank slashes home loan interest rates to as low as 5.64%

Horizon Bank debuted a new, near-market-leading home loan interest rate this week, cutting that on its three-year fixed product by five basis points to 5.64% p.a.

Few home loans best such an advertised rate right now and it will no doubt turn heads.

Interestingly, however, the lender lifted rates offered on five-year fixed periods, insinuating it expects rates to wobble in the years to come.

This week's changes for owner-occupiers making principal and interest repayments were:

Product	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Fixed Rate Home Loan One year	≤70%	-10bp	5.89%	6.51%
Fixed Rate Home Loan Two years	≤70%	-10bp	5.69%	6.42%
Fixed Rate Home Loan Three years	≤70%	-5bp	5.64%	6.33%
Fixed Rate Home Loan Five years	≤70%	+10bp	5.79%	6.27%

Meanwhile, these changes might catch the attention of investors making principal and interest repayments:

Product	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Fixed Rate Investment Loan One year	≤70%	-10bp	6.14%	6.76%
Fixed Rate Investment Loan Two years	≤70%	-10bp	5.94%	6.67%
Fixed Rate Investment Loan Three years	≤70%	-5bp	5.89%	6.58%
Fixed Rate Investment Loan Five years	≤70%	+10bp	6.04%	6.52%

HSBC & Credit Union SA shake up special offer rates

Multinational banking giant HSBC and South Australian mutual Credit Union SA made notable home loan rate moves in the 'special offer space' this week.

HSBC lifted the rate promised to new borrowers taking out a packaged home loan and making principal and interest repayments, with changes including:

Product	LVR	Change	New rate (p.a.)	Min LVR
Home Loan Package Variable P&I Promotional Offer	70-80%	+10bp	6.29%	6.65%
Home Loan Package Variable P&I Promotional Offer	80-90%	+10bp	6.59%	6.95%

At the same time, Credit Union SA slashed the special rate offered for owner-occupiers taking out a new variable rate, principal and interest home loan.

Changes include: 

Product	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Variable Home Loan Package Special Offer	≤60%	-10bp	6.04%	6.41%
Variable Home Loan Package Special Offer	<80%	-10bp	6.09%	6.46%

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