Home News NAB cuts home loan interest rates, ANZ raises

NAB cuts home loan interest rates, ANZ raises

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.

By Harrison Astbury

First published on 22 May 2020

NAB cuts home loan interest rates, ANZ raises

Photo by Lycheeart on Unsplash

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.

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*).

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Harrison Astbury

Harrison is Savings.com.au's Assistant Editor, and also Editor & Research Analyst of sister comparison site InfoChoice.com.au. He is also the co-host of the Savings Tip Jar podcast alongside Dominic Beattie. Prior to joining the group in 2020, Harrison has since 2015 been lending his expertise to other publications in mining, financial comparison, and traditional newspaper media.

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NAB cuts home loan interest rates, ANZ raises