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CBA and NAB hike rates despite no RBA decision

CBA and NAB have hit new customers with a mortgage rate hike despite no decision from the RBA.

A composite image of the exteriors of a CBA and NAB building.
CBA and NAB have slammed new customers with a mortgage hike. (Source: Getty)

Australia’s largest and third-largest lenders - Commonwealth Bank (CBA) and NAB - have hiked select mortgage rates for new customers.

CBA increased the variable rate on its no-frills home loan for new owner-occupiers and investors with deposits of 30 per cent or more. The bank has also hiked its one- to three-year fixed rates for owner-occupiers and investors.

Australia’s third-largest lender, NAB, also increased its basic variable home loan for new customers. However, in contrast to CBA, NAB only lifted the rate for loans with smaller deposits - of 20 per cent or less. The rates for new customers with bigger deposits remain the same.

Rate changes from CBA:

Product

Old Rate

New Rate

Change


CBA Extra Home Loan (variable)(under 70% loan-to-value ratio)

5.12%

5.22%

+0.10%


1-year fixed

5.59%

5.99%

+0.40%


2-year fixed

5.99%

6.09%

+0.10%


3-year fixed

5.79%

5.99%

+0.20%


Rate changes from NAB:

Product

Old Rate

New Rate

Change


NAB Base Variable Rate home loan(loan-to-value ratio over 80%)

6.24%

6.44%

+0.20%


RateCity.com.au research director Sally Tindall said CBA’s fixed-rate increases were no surprise.

“Cost-of-funding pressures, combined with a now-widespread expectation there will be three more cash rate hikes in as many months, are likely to have triggered this rise,” Tindall said.

“Today’s increase to the bank’s lowest no-frills home loan is unexpected, however, the bank still has competitive advertised rates for borrowers looking for an offset account. CBA isn’t walking away from competition in the variable-home-loan space. The bank is just pushing customers in a different direction.”

However, Tindall said NAB’s increase to its basic variable rate for borrowers with deposits of less than 20 per cent was a blow for would-be buyers.

“All four big banks charge customers with small deposits higher rates because they’re seen as riskier borrowers, however, the difference - even within the Big Four - is stark,” she said.

“Borrowers with smaller deposits would do well to shop around. While most banks sting low-deposit customers with higher interest charges, there are still a handful of lenders offering rates under 5 per cent for those with little equity.”

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