Happy 2019 home loan borrowers from the NAB as the bank finally joined its big three rivals in hiking variable mortgage rates.
NAB will from next Thursday raise its standard variable rate for owner-occupiers repaying principal and interest by 0.12 percentage points to 5.36%.
Its owner-occupier interest-only rate and all investor rates will rise by 0.16 percentage points.
The move will add $22 per month to the principal and interest repayments on a $300,000 owner-occupier home loan over a 30-year term.
NAB had for months resisted following Commonwealth Bank, Westpac, and ANZ in imposing out-of-cycle rate hikes. The trio lifted their rates in August of 2018.
NAB claimed it was sitting on rates because of a desire to reward customer loyalty and build trust – being mentioned adversely in the banking royal commission at the time no doubt was in the forefront of the management’s minds as the bank’s reputation took several big hits.
But on Thursday said it was raising standard variable rates for both owner-occupiers and investors with the bank’s consumer boss (Former NSW Premier) Mike Baird trotting out to sell the story.
He claimed that NAB was balancing those aims with the need to satisfy shareholders and respond to increased funding costs.
“Our decision to hold our standard variable rate since September last year, the only major Australian bank to do so, has led to around $70 million remaining in the households of more than 930,000 NAB customers,” the former NSW premier said.
“We wanted to reward our existing customers for their loyalty and held off as long as we could despite being subject to the same increasing wholesale funding costs and market pressures as other major lenders.”
Westpac sparked the round of rate increases in August, citing funding pressures even though the Reserve Bank has kept the cash rate at a record low 1.5% since August 2016.
Mr. Baird said on Thursday NAB has been proactively contacting its home loan customers to provide a big-picture view of their financial situation and ensure they have the right NAB products and services.
“Through these check-ins, we’ve advised more than 100,000 customers that they’re ahead on their repayments which gives them the flexibility to take a breather on payments if they ever need it,” Mr. Baird said.
“We’ve also helped almost 200,000 customers understand how they can save more on interest by setting up an offset account.”
Mr. Baird said these initiatives were complemented by a range of other improvements including NAB’s comprehensive drought assistance and relief program and continuing to offer first home buyers a special offer rate of 3.69% per annum, fixed for two years^.
“We’re proud to be backing Australians to meet their home lending needs and encourage our customers to get in touch with us to discuss the right product for them now and into the future,” Mr. Baird said.
