NAB has slashed 60 basis points off its Tailored three-year fixed principal and interest (P&I) loans for loan-to-value ratios (LVR) 70% and under, taking the new rate to 5.99% p.a. (6.64% p.a. comparison rate).
This is the lowest rate on such a product from the major banks by a sizeable margin. However, consider the lowest in our database belongs to Community First Bank at 5.59% p.a. (6.29% p.a. comparison rate*).
It's seen as a bold move by a big bank to put a '5' in front of a published interest rate, particularly ahead of next month's Reserve Bank of Australia (RBA) board meeting where there's speculation of a possible cash rate hike.
For LVRs 70% and over, NAB's new three-year fixed rate is 6.04% p.a. (6.80% p.a. comparison rate).
Market watchers have suggested NAB is testing the water with a fixed rate below 6% for new homebuyers losing hope that interest rates will drop this year.
Fixed rate comeback?
Fixed rate loans haven't exactly been flying off the shelf so far in 2024 with the latest figures showing less than 2% of new home lending is at fixed rates.
It seems home buyers are still holding out for interest rates to fall in 2024 as had been widely anticipated at the start of the year.
But since then, inflation has proven to be stickier than expected with the RBA adamant that interest rates will not be dropping until the board is convinced inflation is returning to its target zone of 2-3%.
At the latest quarterly reading, annual CPI inflation came in at 3.6% over the 12 months to March 2024.
The critical June quarter CPI data is due out on Wednesday, ahead of the RBA's next board meeting on 5-6 August.
Of the big four banks, CommBank and Westpac are forecasting interest rates will fall in November with NAB and ANZ now predicting there'll be no cut in the cash rate until 2025.
ubank cuts variable rates
Meantime, NAB's online bank ubank has also dropped some of its variable home loan rates this week.
The new rates are as follows:
| Product name | Change (%) | New rate | Comparison rate |
| Flex Variable IO <60% | -0.05 | 6.64% p.a. | 6.58% p.a. |
| Flex Variable IO 60-70% | -0.05 | 6.69% p.a. | 6.63% p.a. |
| Flex Variable IO 70-80% | -0.05 | 6.69% p.a. | 6.63% p.a. |
| Investment Flex Variable P&I <60% | -0.10 | 6.29% p.a. | 6.53% p.a. |
| Investment Flex Variable P&I 60-70% | -0.10 | 6.34% p.a. | 6.58% p.a. |
| Investment Flex Variable P&I 70-80% | -0.10 | 6.34% p.a. | 6.58% p.a. |
Horizon Bank adjusts fixed rates
The customer-owned bank, based on the New South Wales south coast, has also dropped a raft of fixed rate loans this week, although tweaked its five-year rates marginally higher.
The changes take Horizon Bank's fixed rate home loans for owner occupiers with LVR ≤70% substantially below the 6% mark, as follows:
| Product Name | Change (%) | New rate | Comparison rate |
| Fixed Rate Home Loan 1 year | -0.1 | 5.89% p.a. | 6.51% p.a. |
| Fixed Rate Home Loan 2 years | -0.1 | 5.69% p.a. | 6.42% p.a. |
| Fixed Rate Home Loan 3 years | -0.1 | 5.64% p.a. | 6.33% p.a. |
| Fixed Rate Home Loan 5 years | -0.1 | 5.79% p.a. | 6.27% p.a. |
Fixed rate investor loans, both P&I and interest only (IO), have also been cut by up to 10 basis points.
Horizon's fixed rate Investment loan P&I for LVR ≤70%, fixed for three years, is now 5.89% p.a. (6.58% p.a. comparison rate).
HSBC tweaks fixed and package variable rates
Finally, the Hong Kong-based bank has shifted many of its rates by up to 20 basis points this week.
Rates on HSBC's fixed term loans of three years or more have generally fallen, while the rates on shorter terms for both owner occupiers and investors have edged higher.
Its Home Loan Package for owner occupiers, fixed for three years IO for LVR <60-80%, is now 6.29% p.a. (6.64% p.a. comparison rate), dropping 10 basis points.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
