NAB cuts home loan rates as it reaches First Home Loan Deposit Scheme milestone

author-avatar By on June 18, 2020
NAB cuts home loan rates as it reaches First Home Loan Deposit Scheme milestone

Source: Wikimedia Commons

NAB has today cut various home loan rates to its own record lows, as it announces a new customer milestone through the First Home Loan Deposit Scheme.

According to the major bank, NAB has helped 1,000 customers purchase their first home through the first home loan deposit scheme (FHLDS) - the second bank to reach this number after Commbank did so in late April - and stands ready to help even more when the next round of places opens up on 1 July. 

In terms of interest rates, NAB has lowered the rate on its no-frills NAB Base Variable Rate special offer to a "historical low", down by 15 basis points to 2.69% p.a. (comparison rate 2.69% p.a*), for owner-occupiers paying principal and interest (P&I) who have at least a 20% deposit.

It has also cut various fixed rates for both owner-occupiers and residential investors paying principal and interest: NAB Choice Package fixed-rates now start from 2.19% p.a. (comparison rate 4.02% p.a*) for two-years. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner-occupiers.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
Budget Home Loan OO P&I
2.68% 2.74% $1,618 Go to site
2.89% 2.89% $1,663 More details
2.39% 2.40% $1,558 More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 08 July 2020. View disclaimer.

Complete NAB home loan changes: Effective 18 June 2020

With the exception of the Base Variable Rate loan, which was cut by 15 basis points, each of the other loans changed by NAB were cut by 10 basis points. 

These cuts apply across both owner-occupier and investor loans (P&I only), on a total of nine different home loan products. 

The different home loan cuts (effective today) can be seen below. 

Owner-occupier

  • Base Variable Rate P&I Special Offer <80%: -15 basis points to 2.69% p.a. (2.69% p.a comparison rate*)
  • Tailored Fixed - P&I 1 yr: -10 basis points to 2.39% p.a. (4.45% p.a. comparison rate*)
  • Tailored Fixed - P&I 2 yrs: -10 basis points to 2.29% p.a. (4.25% p.a. comparison rate*)
  • Choice Package Tailored Fixed - P&I 1 yr 150k+: -10 basis points to 2.29% p.a (4.17% p.a. comparison rate*) 
  • Choice Package Tailored Fixed - P&I 2 yrs 150k+: -10 basis points to 2.19% p.a. (4.02% p.a. comparison rate*)

Investor

  • Inv Tailored Fixed - P&I 1 yr: -10 basis points to 2.69% p.a (5.02% p.a. comparison rate*)
  • Inv Tailored Fixed - P&I 2 yrs: -10 basis points to 2.59% p.a. (4.78% p.a. comparison rate*) 
  • Choice Package Inv Tailored Fixed - P&I 1 yr 150k+: -10 basis points to 2.59% p.a (4.73% p.a. comparison rate*)
  • Choice Package Inv Tailored Fixed - P&I 2 yrs 150k+: -10 basis points to 2.49% p.a. (4.55% p.a. comparison rate*)

Read: NAB cuts home loan interest rates, ANZ raises (May 2020) 

NAB Group Executive Personal Banking Rachel Slade said the introduction of these new rates, as well as NAB's commitment to the FHLDS would help customers at a time when the property market has significantly changed due to the coronavirus. 

“It’s great to see so many Australians purchase their first home sooner than they expected, even at a time when the coronavirus crisis has impacted the housing market,” Ms Slade said.

“We have seen a diverse range of customers access the Scheme. We’re seeing both young homebuyers in their 20s or 30s, and customers in their 50s, buying their first property.”

According to Ms Slade, first home buyers can apply for conditional approval with a NAB banker or broker to get prepared for the scheme's next round of places, which will open in just two weeks on 1 July. 

“On 1 July thousands more spots become available and we look forward to helping many more Australians achieve their home ownership dreams,” she said.

“NAB is pleased to continue partnering with the Federal Government and the National Housing Finance and Investment Corporation (NHFIC) to help customers purchase their first home via the Scheme in the next financial year.

“We know buying your first home is an incredibly exciting experience for many Australians. We also recognise that it can be daunting and we’re here to help our customers throughout this journey."

About the First Home Loan Deposit Scheme

NAB was the first lender selected to participate in the government's First Home Loan Deposit Scheme back in November 2019 by the National Housing Finance and Investment Corporation (NHFIC). 

Customers can check their eligibility on the NHFIC website, can also view a complete list of lenders taking part in the scheme here

Data collected by the (NHFIC) shows there are no more spots available in the scheme until the next round of places opens up in a fortnight. 

The scheme is designed to help eligible first home buyers secure a home loan with a deposit as little as 5% by guaranteeing up to 15% the value of the home, saving them from the often-hefty cost of Lenders Mortgage Insurance (LMI).

The guarantee is limited to 10,000 spots each year, and only applies to owner-occupied loans with principal and interest repayments.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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