- NAB has lifted fixed home loan rates by 15 basis points across a wide range of owner-occupier and investor products.
- The increase pushes some fixed mortgage rates above 7%, with owner-occupier rates now starting from 6.49%.
- The move comes as markets price a 76% chance of an RBA rate hike this month, with NAB the only big four bank forecasting a September increase.
NAB has increased fixed home loan rates by 15 basis points across a broad range of owner-occupier and investor mortgages.
This makes NAB the second major bank to raise fixed home loan rates across a wide range of products after Macquarie hiked fixed mortgage rates earlier this month.
See also: Macquarie hikes fixed home loan rates
The increases affect NAB's Tailored Fixed and Investment Tailored Fixed products across one to five-year terms, with some fixed rates now climbing above 7%.
The move comes as the ASX price a 76% chance that the Reserve Bank will lift the cash rate by 25 basis points to 4.60% when its monetary policy board meets on September 28-29.
Fixed borrowers face higher costs
For owner-occupiers making principal-and-interest repayments, rates now start at 6.49% for a two-year fixed term and rise to 6.74% for borrowers with an LVR above 80%.
The increase was applied uniformly across the board, with every owner-occupier principal-and-interest fixed rate rising by 15 bps.
Fixed term | LVR ≤80% (comparison rate*) | LVR >80% (comparison rate*) |
1 year | 6.59% (7.07% p.a.*) | 6.69% (7.08% p.a.*) |
2 years | 6.49% (7.01% p.a.*) | 6.59% (7.03% p.a.*) |
3 years | 6.64% (7.01% p.a.*) | 6.74% (7.04% p.a.*) |
4 years | 6.64% (6.98% p.a.*) | 6.74% (7.02% p.a.*) |
5 years | 6.64% (6.96% p.a.*) | 6.74% (7.00% p.a.*) |
Why fixed rates are rising
The increase highlights the growing gap between fixed-rate pricing and the public debate around variable mortgage rates.
While borrowers typically focus on where the Reserve Bank is expected to move next, fixed rates are heavily influenced by wholesale funding markets and expectations about future interest rates.
In recent months, stronger-than-expected inflation data and resilience in economic activity have prompted markets to reassess the likelihood of further monetary tightening.
Those expectations flow through to funding costs, which can push fixed mortgage rates higher even before the Reserve Bank acts.
NAB's decision suggests the bank is positioning for a higher-for-longer interest rate environment than many borrowers had anticipated earlier in the year.
Markets and banks diverge on timing, not direction
The key debate is no longer whether rates could rise again, but when.
NAB remains the only major bank forecasting a September increase, while the other big four lenders believe the Reserve Bank will hold fire until November.
However, market pricing and economist forecasts increasingly point to at least one additional rate hike before the end of the tightening cycle.