NAB has today announced it will reduce its variable home loan interest rates by 0.19% per annum.
NAB Chief Customer Officer Consumer Banking, Mike Baird said the 19-basis point reduction could save owner-occupier customers paying principal and interest on a $400,000 home loan an additional $552 a year.
“This is on top of the 25-basis point reduction last month, which means customers with an average $400,000 loan could save a total of $1296 a year,” Mr Baird said.
“In making this decision, we have also considered our customers who rely on income from deposits, including farmers and growing numbers of retirees, as well as those wanting to build their savings.”
“For any changes to interest rates on savings accounts following today’s RBA cash rate announcement, NAB will not decrease rates by more than 19 basis points.
“Decisions like these are difficult and reflect the current unique circumstances, with home loan rates at record lows at the same time as deposit and savings rates also being at record lows.”
Mr Baird said the bank had considered NAB’s 930,000 home loan customers, 3 million savings and investment customers and 588,000 shareholders in making the decision.
“Getting the balance right is an ongoing challenge for banks and with 9 million customers, making the right decisions for our customers matters for the Australian economy.”
Mr Baird said the bank had assessed a range of factors including funding costs, particularly for deposits, as well as competitive pressures in making these changes.
“The difference between what we charge and how much it costs us to fund a mortgage remains under pressure and while the circumstances of each RBA cash rate decision will vary and has some influence on the cost of borrowing money, it is not the only funding cost driver for NAB,” he said.
“At the same time, we are committed to investing in and improving our services and looking at ways to help our customers by remaining competitive on our rates.”
From 12 July 2019, NAB’s advertised Tailored Home Loan variable rates will be as follows:
- NAB home loan customers are, on average, 33.7 months ahead on their repayments