NAB the latest of the major banks to hike fixed interest rates

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on April 22, 2022 Fact Checked
NAB the latest of the major banks to hike fixed interest rates

As May edges closer with a potential RBA cash rate hike in tow, NAB has lifted fixed home loan rates by up to 80 basis points.

Marking its second increase this month and the fourth of the year, NAB has increased fixed home loan rates by up to 80 basis points.

This follows on from Westpac and ANZ increasing in-kind last week.

Across NAB's home loan portfolio, 'Tailored' and ‘Choice Package' products were increased for both owner occupiers and investors.

Increases applied to both principal and interest (P&I) and interest only (IO) loans with loan-to-value ratios (LVR) up to 95%.

Highlights of fixed rate increases across NAB’s home loan portfolio included:

  • Tailored Fixed P&I 2 Years: 50 basis point increase to 4.09% p.a. (4.57% p.a. comparison rate*)
  • Tailored Fixed IO 2 Years: 50 basis point increase to 4.79% p.a. (4.82% p.a. comparison rate*)
  • Choice Package Tailored Fixed - P&I 4 Years 150k+: 60 basis point increase to 4.79% p.a. (4.62% p.a. comparison rate*)
  • Choice Package Tailored Fixed - IO 4 Years 150k+: 60 basis point increase to 5.29% p.a. (4.78% p.a. comparison rate*)

The P&I 4 Year Tailored Fixed loan for owner occupiers is 271 basis points higher than it was in March 2021, adding $902 in interest payments per month to a 30-year $600,000 mortgage.

And for investors:

  • Investment Tailored Fixed P&I 2 Years: 60 basis point increase to 4.29% p.a. (5.10% p.a. comparison rate*)
  • Investment Tailored Fixed IO 2 Years: 80 basis point increase to 4.59% p.a. (5.22% p.a. comparison rate*)
  • Choice Package Investment Tailored Fixed - P&I 4 yrs 150k+: 75 basis point increase to 5.09% p.a. (5.11% p.a. comparison rate*)
  • Choice Package Investment Tailored Fixed - IO in arrears 4 yrs 150k+: 70 basis point increase to 5.29% p.a. (5.15% p.a. comparison rate*)

Read more: The impact of rising interest rates & falling home prices on RBA cash rate

Around the grounds

Newcastle Permanent

Newcastle Permanent increased fixed home loan rates across their portfolio for owner occupiers and investors by up to 70 basis points. 

Some key changes applied to five-year home loans, including:

  • Residential Fixed P&I 5 Years: 40 basis point increase to 4.89% p.a. (4.56% p.a. comparison rate*)
  • Residential Fixed IO 5 Years: 40 basis point increase to 5.59% p.a. (4.83% p.a. comparison rate*)
  • Investment Fixed P&I 5 Years: 40 basis point increase to 4.99% p.a. (4.80% p.a. comparison rate*)
  • Investment Fixed IO 5 Years: 70 basis point increase to 5.29% p.a. (4.91% p.a. comparison rate*)

Gateway Bank

Gateway Bank increased fixed home loan rates for both owner occupiers and investors by up to 95 basis points.

Some key changes across their home loan portfolio included:

  • Residential Fixed 3 Years: 95 basis point increase to 4.74% p.a. (4.57% p.a. comparison rate*)
  • Investment Fixed 3 Years: 90 basis point increase to 4.84% p.a. (5.15% p.a. comparison rate*)
  • Investment Fixed IO 3 Years: 65 basis point increase to 4.99% p.a. (5.19% p.a. comparison rate*)

Qudos Bank

The customer-owned bank increased fixed home loan rates for both owner occupiers and investors by up to 110 basis points. 

Highlights of these increases across Qudos Bank's home loan portfolio with up to 90% LVR included:

  • Owner Occupied Fixed P&I 2 Years: 100 basis point increase to 4.19% p.a. (2.78% p.a. comparison rate*)
  • Owner Occupied Fixed IO 2 Years: 110 basis point increase to 4.79% p.a. (2.88% p.a. comparison rate*)
  • Investment Fixed P&I 2 Years: 60 basis point increase to 4.49% p.a. (3.29% p.a. comparison rate*)
  • Investment Fixed IO 2 Years: 60 basis point increase to 4.69% p.a. (3.32% p.a. comparison rate*)

G&C Mutual 

G&C Mutual increased fixed home loan rates across its portfolio by up to 141 basis points.

Some highlights included:

  • Residential Fixed P&I 1 Year: 91 basis point increase to 2.89% p.a. (2.94% p.a. comparison rate*)
  • Residential Fixed IO 1 Year: 141 basis point increase to 3.69% p.a. (3.73% p.a. comparison rate*)
  • Investment Fixed P&I 2 Years: 80 basis point increase to 3.89% p.a. (3.95% p.a. comparison rate*)
  • Investment Fixed IO 2 Years: 105 basis point increase to 4.34% p.a. (4.38% p.a. comparison rate*)

RBA cash rate: To move or not to move?

AMP Chief Economist Shane Oliver believes the RBA waiting until June to move the cash rate is already looking risky, with a minimal hike of 0.15% simply adding to that risk.

“Australia is facing the same risks as in various other countries with inflation expectations seemingly without control and as a result locking in higher than target inflation,” Mr Oliver said.

“The latest NAB business survey for March showed a further sharp acceleration in wage and inflation pressures pointing to March quarter headline and underlying inflation coming in well above implied RBA expectations.

“There is a strong case that a blowout March quarter inflation report should be met with a rate hike in May and that the first hike should be 0.4%, taking the cash rates to 0.5%.

“This is because a 0.15% hike won’t send a particularly strong signal in terms of its anti-inflation resolve.”

The federal election is pencilled in for 21 May.

Eyes are now turning to ABS inflation data released next week as an indicator towards what may potentially lie ahead at the RBA’s May board meeting.

Westpac economists expect trimmed mean inflation (the figure the RBA looks at) to rise to an annualised rate of 3.4% from 2.6%.

They expect headline inflation to hit 4.9%; in contrast recent United States headline figures hit 8.5%.

Last week the Reserve Bank of New Zealand also increased its official cash rate by 50 basis points to 1.50%.


Image by Pixabay via Pexels



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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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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