NAB cuts fixed home loan rates by up to 0.65 per cent in major lending shake-up
Written by admin on October 8, 2024
National Australia Bank (NAB) has cut its fixed home loan rates by up to 0.65 percentage points in a major lending shake-up.
The move takes the big four bank’s lowest three-year fixed rate down to 5.89 per cent for owner-occupiers who have a 30 per cent deposit.
But experts say borrowers are still opting to stay on variable rates in anticipation of cash rate cuts that could arrive as early as December.
“Right now there’s not a huge gap between the lowest fixed and lowest variable rates, but a few cash rate cuts could paint a different picture,” RateCity.com.au money editor Laine Gordon explained.
“Short-term fixed rates can also be more work as you’ll need to renegotiate or refinance at the end of the fixed period or risk rolling over to an uncompetitive variable rate when the fixed period expires.”
NAB customers with a four or five-year fixed term received the largest change in percentage points – with the rate dropping from 6.79 per cent to 6.24 per cent on a four-year term (-0.50).
On a five-year term, the new rate is 6.29 per cent compared with the old rate of 6.79 per cent.
NAB’s lowest three-year fixed rate is now in line with the Commonwealth Bank (CBA) and Westpac.
ANZ remains the only bank offering the same rate above 6 per cent.
Last week, Macquarie Bank slashed a range of fixed rates by up to 0.40 percentage points to 5.39 per cent.
Despite the lower options, the proportion of borrowers opting for a fixed rate was still at “near-record lows”, Ms Gordon said.
The latest lending indicator figures from the Australian Bureau of Statistics reveal just 2 per cent of new and refinanced loans in August opted for a fixed rate.
“NAB’s own economic team previously predicted the first cash rate cut would come in May next year but recently changed its forecast, now predicting the first cut will arrive in February 2025,” she said.
Ms Gordon said borrowers thinking about fixing their home loan should know about the inflexibility of fixed rates.
She said this was because there were caps on extra repayments and typically no access to an offset account.
