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NAB cuts rates for home buyers, beating out its Big Four rivals

Posted: 18 June 2020 1:42 pm
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A photo of Sydney's CBD.

With owner-occupier rates falling to 2.19%, NAB is now the most competitive of the Big Four banks.

NAB today announced it was lowering interest rates on its main fixed and variable rate home loans for owner-occupiers. This move will make NAB's offers the most competitive mortgage rates among the Big Four banks.

Here are NAB's lowest offers, which take effect from 18 June 2020 for new borrowers:

  • NAB Base Variable Rate Special Offer: 2.69% (down from 2.84%).
  • NAB Choice Package 2 Year Fixed: 2.19% (down from 2.29%).

With most Australian borrowers sticking with one of the Big Four, a drop in rates is a big deal. NAB's rate cuts make its offers the lowest of the Big Four.

Here are the lowest owner-occupier rates from each of the Big Four so you can compare for yourself:

BankRate typeInterest rate
NABVariable2.69%
CBAVariable2.79%
WestpacVariable2.79%
ANZVariable2.72%
NABFixed2.19%
CBAFixed2.29%
WestpacFixed2.29%
ANZFixed2.29%

A difference of 10 basis points (in others, from 2.29% to 2.19%) might not make a huge difference to your monthly repayment but over the long life of a mortgage it definitely adds up.

Here's what a difference of 10 basis points means to a loan amount of $500,000 over a 30-year loan term:

  • 2.29% = monthly repayments of $1,921
  • 2.19% = monthly repayments of $1,895
  • Difference per month = $26
  • Savings over 30 years = $9,360

How do these rates compare to other lenders?

Interest rates on home loans have never been lower. And this is true for the big banks and smaller lenders as well.

Typically you can get a lower rate by going with a smaller lender, such as an online lender or a small credit union. But rates have been so competitive lately that the offers from the Big Four are very close to the lowest rates on the market.

Here are the lowest fixed and variable owner-occupier rates (at time of publication) compared to NAB's new rates.

ProductInterest rateRate type
Tic:Toc Live in 10% deposit Variable Rate - Principal & Interest2.39%Variable
NAB Base Variable Rate Home Loan - Principal and Interest (limited time special offer for owner occupiers only LVR <80%)2.69%Variable
HSBC Fixed Rate Home Loan - 2 Year Fixed Rate LVR 80% or below (Owner Occupier, P&I)2.09%Fixed
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier, P&I)2.19%Fixed

While the gap between NAB's lowest variable (2.69%) and 2.39% is a notable 30 basis points, the gap in fixed rates is 10 basis points.

The lesson here is that competitive home loan deals are everywhere to be found, with lenders big and small. Whether you're looking for your first home loan or already have one, it's vital to compare rates, calculate your repayments and make sure you're getting a good deal.

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