NAB’s latest mortgage rate rise is a timely reminder to check your rate and find a better deal

Posted: 24 January 2019 2:22 pm
Woman at her desk looking stressed.

NAB is raising its Tailored Home Loan variable rates, but those rates are already high. Every other lender (including NAB itself) has much better offers.

It's always news when one of the Big Four raises interest rates, and NAB has done just that. The bank will increase investor and owner-occupier rates on its variable Tailored Home Loans on 31 January 2019.

Increased funding costs are to blame, once again, with NAB's Chief Customer Officer - Consumer Banking Mike Baird (who has some experience with unpopular decisions) saying in a statement that the bank "held off as long as we could despite being subject to the same increasing wholesale funding costs and market pressures as other major lenders."

Increases in mortgage rates are news for a reason. A rate rise of 16 basis points on a $400,000 mortgage over 30 years would add hundreds of dollars a year in repayments.

But this doesn't have to hurt NAB customers, current or future. NAB is only touching one product. The bank's lowest fixed rate offer for first home buyers is currently a very healthy 3.69%.

NAB even specified in its statement that this rate won't be affected by the changes on 31 January.

Here are the affected NAB rates

NAB's lowest variable rate is 3.87%. That's certainly not the lowest rate you can see on Finder, but it's far lower than the Tailored Owner-Occupier Principal and Interest rate of 5.24% (which will rise to 5.36%).

There are better deals everywhere, even with the Big Four. And while rates are usually higher for investor and interest-only loans, there are far more competitive rates on offer in these categories too.

The lesson is simple: check your interest rate. If it's too high, demand better. Find the lowest rate your lender offers and ask to switch to it. Just make sure it's a comparable product (if you're an investor, you can't ask to switch to your lender's lowest owner-occupier rate).

If your bank doesn't cooperate, then ask for a mortgage discharge form. Then start comparing rates and refinance to a new and better loan.

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