The updates, effective as of Thursday, could provide more competitive options for both owner-occupiers and investors in the current high interest rate environment.
NAB's Base Variable Rate Home Loan now advertises a rate of 6.44% p.a. for owner-occupiers making principal and interest (P&I) repayments (comparison rate* 6.48% p.a.).
That's the lowest variable rate in NAB's home loan lineup.
Rates for property investors were also slashed, with those turning to NAB's basic product now able to realise a variable rate of 6.96% p.a. when making P&I repayments or 7.67% p.a. when paying interest only (IO) (comparison rates* 7.00% p.a. and 7.32% p.a. respectively).
Here's a detailed breakdown of NAB's latest rate changes:
| Borrower | Change | New rate (p.a.) | Comparison rate* (p.a.) |
|---|---|---|---|
| Owner-occupier P&I |
-40bp | 6.44% | 6.48% |
| Owner-occupier IO |
-60bp | 7.34% | 6.87% |
| Investor P&I |
-40bp | 6.69% | 7.00% |
| Investor IO |
-60bp | 7.67% | 7.32% |
NAB's Base Variable Rate Home Loan is available to owner-occupiers with deposits as small as 5%, or 10% for investors.
Though, those borrowing with a loan-to-value ratio (LVR) over 80% might be up for Lenders Mortgage Insurance (LMI).
The home loan product also doesn't demand monthly or annual fees and comes with a redraw facility, but doesn't offer an offset account.
The big four bank's latest move marks the fourth time it's dropped home loan rates this year, and the second time its variable offerings have received a haircut in 2024.
CommBank, Westpac, and ANZ predict the Reserve Bank of Australia (RBA) will begin cutting the cash rate - a major influence on interest rates - in February 2025.
NAB is more pessimistic, predicting the first cash rate cut to come in May 2025.
Do NAB's new variable rates stack up against the broader market?
It's rarely the case that big four banks offer market-leading mortgage rates, and it's often said the banking majors are more negotiable on rates than other lenders might be
That said, NAB's newest home loan rates remain notably higher than what looks to be the market's lowest - 5.75% p.a. (comparison rate* 5.88% p.a.).
That's offered by Arab Bank's Basics Home Loan for owner-occupiers with deposits of at least 40% who make P&I repayments.
For those with a deposit of 30% or more, Horizon Bank's Home Sweet Home Loan advertises a variable rate of 5.89% p.a. (comparison rate* 6.59% p.a.).
Meanwhile, Tiimely Home promises a rate of 5.94% p.a. for owner-occupiers with deposits as small as 10% (comparison rate* 5.95% p.a.).
How do NAB's variable rates compare against other big four banks'?
It could also be worth comparing NAB's newly-dropped lowest variable rate against the lowest offered by its big four peers:
| Max LVR | Advertised rate (p.a.) |
Comparison rate* (p.a.) |
|
|---|---|---|---|
| CommBank Digi Home Loan (new-to-bank refinancing only) |
60% | 6.15% | 6.28% |
| NAB Base Variable Rate Home Loan |
95% | 6.44% | 6.48% |
| Westpac Flexi First Option Home Loan |
70% | 6.44% | 6.76% |
| ANZ ANZ Plus home loan(refinancing only) |
80% | 6.14% | 6.15% |
As the chart above shows, the lowest rates on offer from the big four banks are available exclusively to those refinancing an existing home loan.
Both CommBank's Digi Home Loan and the ANZ Plus home loan also come with strict eligibility criteria and are entirely app-based.
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Lender Home Loan Interest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option Tags Features Link Compare Promoted Product Disclosure
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