Mortgage rate moves: NAB raises rates while Heritage Bank and Westpac cut them

Richard Whitten 4 December 2017

Man balancing scales

The Reserve Bank is holding firm on rates but the market is moving in every direction.

While many lenders are cutting rates and the Reserve Bank is keeping the cash rate on hold, NAB has raised its fixed rate investment products by 30 basis points.

Westpac is moving in the other direction, telling its brokers that it will soon be cutting rates for fixed rate principal and interest owner-occupier loans. Westpac group, whose brands include St.George, BankSA and Bank of Melbourne, will also be cutting rates on many of its home loans.

Heritage Bank recently announced large cuts across a range of its home loan products, while the Teachers Mutual Bank brands have dropped rates on some of their major products between 10 and 40 basis points.

The market is in an interesting place right now. Property prices in many cities look to be staying flat or even falling. APRA is concerned about rising household debt and irresponsible lending practices. The regulator has imposed limits on investment and interest only lending.

In this context, it isn't hard to see why lenders might raise rates on riskier loans. But with prices so high and so much competition among lenders, it isn't hard to see why most lenders are cutting rates either.

Here are some of the latest rate moves

NAB

  • NAB Tailored Fixed Rate Home Loan – 2 Years Fixed (Investor P&I): was 4.19% now 4.49%
  • NAB Tailored Fixed Rate Home Loan – 3 Years Fixed (Investor P&I): was 4.24% now 4.54%
  • NAB Choice Package Home Loan – 2 Year Fixed (Investor P&I): was 4.09% now 4.39%
  • NAB Choice Package Home Loan – 3 Year Fixed (Investor P&I): was 4.14% now 4.44%

Westpac

The bank is yet to officially announce its rates but cuts of around 5-6 basis points are expected for owner occupier fixed rate loans.

Heritage Bank

  • Heritage Bank Advantage Package – Standard Variable LVR <=80% $700k + (Owner Occupier, P&I) New Customers Only: was 3.99% now 3.89%
  • Heritage Bank Fixed Rate Home Loan – 1 Year Fixed (Investors, IO) New Customers Only: was 4.89% now 4.49%

Teachers Mutual group

  • Teachers Mutual Bank Fixed Option Home Loan – 3 Years (Owner Occupier): was 3.99% now 3.79%
  • UniBank Solutions Plus Home Loan – LVR<=60% $250,000 - $499,999 (Owner Occupier): was 3.89% now 3.79%
  • UniBank Solutions Plus Home Loan – LVR<=60% $150,000 - $249,999 (Owner Occupier): was 4.22% now 3.79%

The recent flurry of rate changes reinforces the need for all homeowners to do a home loan health check and see if they can switch to a loan with a lower rate. For cautious borrowers looking to minimise their risks, now could be a good time to lock in a competitive fixed rate. But for those stuck on a higher fixed rate, it might be worth looking to switch to an even more competitive variable rate loan.

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