NAB cuts home loan interest rates, ANZ raises

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on May 22, 2020
NAB cuts home loan interest rates, ANZ raises

Photo by Lycheeart on Unsplash

National Australia Bank today cut interest rates on a number of home loans by up to 60 basis points, while ANZ raised some residential loans by 10 basis points.

NAB has cut interest rates on investment interest-only loans, a market that has seen a lot of activity in recent weeks.

Curiously, NAB made cuts by up to 60 basis points on its 'In Arrears' products, which despite what the name might suggest, aren't for people falling behind on their mortgages.

Interest-only home loans can be paid one of two ways - in arrears, or in advance.

'In arrears' means paying the interest off at the end of each month, while 'in advance' payments are made once a year.

Paying in advance could help bring forward tax-deductible interest payments.

The 'In Arrears' home loans to see cuts by 60 basis points were:

  • Inv Tailored FIxed IO in arrears 1 year: Now 2.89% p.a. (5.13% p.a. comparison rate*)
  • Inv Tailored FIxed IO in arrears 2 years: Now 2.79% p.a. (4.91% p.a. comparison rate*)
  • Inv Tailored FIxed IO in arrears 3 years: Now 2.79% p.a. (4.70% p.a. comparison rate*)

NAB also cut interest rates on the same product line fixed for four and five years by 20 basis points.

Meanwhile, ANZ raised rates by 10 basis points on two key residential home loan products, both fixed for two years. They are:

  • Breakfree Residential Fixed 2 Years 150k+: Now 2.29% p.a. (4.02% p.a. comparison rate*)
  • Residential Fixed 2 Years: Now 2.44% p.a. (4.10% p.a. comparison rate*)

This slight hike on home loans recently is not unique - ME Bank raised rates by up to 30 basis points at the start of May, a day before its redraw controversy broke.

Both ANZ and NAB were contacted for comment but did not respond in time for deadline.

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.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES
FixedMore details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *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. Rates correct as of January 26, 2022. View disclaimer.

Reduce, Tic:Toc also cut rates

Challenger brands Reduce Home Loans and Tic:Toc also made a number of home loan rate cuts in the past week.

Some key cuts were:

Reduce

Reduce cut rates on quite a large number of residential loans, including the headline product:

  • Low Rider Variable 70% LVR: 15 basis point cut to 2.29% p.a. (2.32% p.a. comparison rate*)

A number of other loans in the same product category with 80% LVR, and also ones paying interest-only, were cut by up to 45 basis points.

Tic:Toc

Tic:Toc in the past week made just one key cut, which was a 15 basis point cut to the Live In Variable home loan paying principal and interest, down to 2.39% p.a. (2.40% p.a. comparison rate*).


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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