Yahoo Finance 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.
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.
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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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