NAB follows Westpac in hiking interest-only rates
NAB has become the second major bank this week to significantly increase its interest-only home loan rates.
NAB has followed Westpac in making the changes to its interest-only rates. The major bank announced it will raise interest-only rates for both owner-occupiers and investors by 35 basis points. The change will take the bank’s interest-only rate to 5.77% for owner-occupiers and 6.25% for investors.
Along with the rate rise for interest-only loans, NAB said it will cut rates by 8 basis points for owner-occupiers making principal and interest payments.
“The 0.08% per annum decrease will see owner-occupier customers making principal and interest repayments save $14 each month, for $168 each year, and help them to pay off their home loan sooner,” NAB chief operating officer Antony Cahill said.
Cahill said the decision to raise interest-only rates came in response to regulatory changes by the Australian Prudential Regulation Authority (APRA).
“We need to comply with our regulatory requirements, including APRA’s 30% limit on new interest-only lending for residential mortgages, while balancing the needs of customers across our entire portfolio in continuing to provide competitive rates,” he said.
NAB echoed Westpac in claiming the move was not a result of the Federal Government’s levy on major banks.