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While fixed home loan rates have been falling on the market for some months, variable rates have been slower to move.
On Thursday, NAB announced its base variable rate for new owner occupiers making principal and interest repayments is now 6.44% pa. (6.48% p.a. comparison rate) – a 40-basis point drop.
Its rates for owner occupiers and investors making interest only repayments have also been slashed by 60 basis points.
Here are the new rates below:
| Product | Change (% p.a.) | New rate | Comparison rate* |
| Base variable rate (P&I) | -0.40 | 6.44% p.a. | 6.48% p.a. |
| Base variable rate (IO) | -0.60 | 7.34% p.a. | 6.87% p.a. |
| Investor base variable rate (P&I) | -0.40 | 6.96% p.a. | 7.00% p.a. |
| Investor base variable rate (IO) | -0.60 | 7.67% p.a. | 7.32% p.a. |
NAB's basic variable home loans come with no application or monthly fees and the above rates are available to owner-occupiers with loan-to-value ratios (LVR) of up to 95%.
Investors must have an LVR of 90% or less in order to receive the new rates.
There are also no charges for making additional payments and a no-fee redraw facility on extra payments.
Big four base variable rates
The move on NAB’s base variable rates puts it in line with the base rates of two of its big four peers, CommBank and Westpac.
Here’s a comparison of the big four’s basic variable rates for new owner occupiers paying P&I below:
| Product | Base variable rate | Comparison rate* | Conditions |
| NAB Basic Variable | 6.44% p.a. | 6.48% p.a. | |
| CBA Standard Variable | 6.34% p.a. | 6.72% p.a. | Part of annual $395 Wealth Package |
| Westpac Featured Basic Variable | 6.44% p.a. | 6.76% p.a. | Includes 2-year 1.64% p.a. discount and 0.10% discount for LVR up to 70% |
| ANZ Standard Variable | 7.24% p.a. | 7.24% p.a. | Rate for LVR 80% or less |
Market rates dropping but cash rate holding
All big four banks have dropped various mortgage interest rates over the past few months despite no movement in the Reserve Bank of Australia’s cash rate.
It’s remained at 4.35% for the past year with the RBA board reiterating it will only cut the rate when it’s satisfied inflation is sustainably within its target range of 2-3% on an annual basis.
In the latest quarterly reading, released last month, annual CPI inflation was at 2.8% although underlying inflation, the RBA’s preferred measure, was at 3.5% p.a.
Falling home loan rates across the market, particularly fixed rates, reflect lower rates on international money markets, where many Australian financial institutions source funds.
All big four banks are expecting a fall in Australia’s cash rate early in 2025, with CommBank, ANZ, and Westpac nominating February while NAB forecasts it will be in the first quarter of the year.
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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 |
