NAB has announced a pre-Christmas reduction in its basic variable home loan rate, targeting new mortgage customers despite the Reserve Bank’s interest rates potentially remaining steady for months. The bank has slashed its rate by 0.4 per cent, bringing it down from 6.84 per cent to 6.44 per cent for new borrowers. According to Mozo’s Rachel Wastell, this adjustment translates to savings of approximately $126 per month on a $500,000 loan, representing a significant saving while awaiting a potential Reserve Bank rate cut.
Despite this move, NAB’s rates are still higher than those offered by ANZ and Commonwealth Bank, which provide digital-only mortgages approximately 0.3 per cent lower. While its rate aligns with Westpac’s, NAB demands a considerably lower minimum deposit. This adjustment is seen as crucial as NAB’s home loan growth has lagged behind competitors in recent months.
However, existing customers might find this news frustrating since the cuts apply solely to new clients. Current borrowers are encouraged to reach out to NAB and request a rate adjustment. With the Reserve Bank’s upcoming meeting less than a month away, experts anticipate that any interest rate cut is unlikely before February.