NAB cuts home loans by up to 55 basis points

author-avatar By on February 22, 2021
NAB cuts home loans by up to 55 basis points

This morning NAB made a wide variety of mortgage rate cuts, including one owner occupier packaged loan by 55 basis points.

NAB's 'Choice Package' loan paying principal and interest (P&I), fixed for five years, was cut by 55 basis points down to 2.24% p.a. (3.66% p.a. comparison rate*).

The same loan with a three year fixed term was also cut by 11 basis points down to 1.98% p.a. (3.83% p.a. comparison rate*)

All in all, NAB cut interest rates of more than 30 individual home loans by between 5 and 55 basis points.

NAB's cuts follow on from ANZ's last week, which cut to its 'lowest ever' home loan rates.

Other noteworthy home loans to get a haircut were:

  • Choice Package Fixed 2 Years P&I: 5 basis point cut to 2.04% p.a. (3.99% p.a. comparison rate*)
  • Tailored Fixed 2 Years P&I: 5 basis cut to 2.14% p.a. (4.22% p.a. comparison rate*)

Investor home loans also received some attention, including:

  • Choice Package Inv Fixed 5 Years P&I: 15 basis point cut to 2.94% p.a. (4.28% p.a. comparison rate*)
  • Inv Tailored Fixed 5 Years P&I: 15 basis point cut to 3.04% p.a. (4.40% p.a. comparison rate*)

The above examples showcase packaged loans received a 10 basis point discount off the regular fixed product interest rate, however the comparison rate, which accounts for package fees and other charges, is much higher. 

NAB executive of home ownership Andy Kerr told said post-Christmas activity is picking up "more quickly than usual".

"Both our three and four-year fixed rates for owner-occupiers paying principal & interest are now below 2%, a level that would have seemed unbelievable just a few years ago," he said.

“For the past few months home lending applications have been at their highest level in several years as buyers flock back into the market after a quiet period through the nationwide lockdowns.

“We expect the current trends to continue in the near-term given the historic low rates and government support programs."

Below you can see how NAB's fixed loans compare to other fixed products for owner occupiers.

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

FixedMore details

Fixed Rate OO P&I - 2 Years

FixedMore details

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

FixedMore details

Owner Occupier Fixed 2 year (LVR < 60%) (Principal and Interest)

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. Rates correct as of October 26, 2021. View disclaimer.

More time in the sun for fixed lending

In the past year, lenders have primarily made rate cuts to fixed home loans for a variety of reasons, including cash flow certainty and because the Reserve Bank has issued cheap funding to banks over the course of three years.

The flow of cheap funding through the economy has been described as "oil running through an engine", albeit at a cost of $200 billion.

However the $200 billion 'term funding facility' is not available to non-bank lenders.

As of November, NAB had access to $26 billion in the term funding facility, at a rate of 0.10% or 0.25% fixed for three years. 

Commonwealth Bank's half-year results indicate its fixed loan book grew 38% compared to the first half of 2020, however the RBA has said the term funding facility will be reshaped in June.

Throughout the pandemic, the playing field has contracted somewhat, with NAB's projected takeover of neobank 86 400, Bank of Queensland's projected takeover of ME Bank, and neobank Xinja's exit from banking altogether.

ME Bank's press release on being taken over by BOQ said: "We believe this change will mean really positive things in the future".

Photo by Bidgee on Wikimedia Commons


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 2020. They are (in descending order): Great Southern Bank, 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 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and

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,, Performance Drive and are part of the Firstmac Group. To read about how 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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Harrison is'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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