NAB hikes: Last Big Four fixed rate under 2% gone
Australia’s third-largest bank, NAB, has today hiked fixed rates for the third time in just over five weeks, closing the door on the last big-four rate under 2 per cent.
NAB increased its owner-occupier and investor fixed rates by up to 0.50 per cent, including its 1-year fixed rate, which was previously 1.99 per cent.
“NAB was the last Big Four bank to hang on to a rate starting with a ‘1’, but the bank has succumbed to funding pressures just like its rivals,” research director Sally Tindall said.
“The number of fixed rates under 2 per cent is fast disappearing.”
In fact, just over six months ago, there were 166 fixed rates sitting below 2 per cent but just 78 remain, Tindall said.
“The exodus is far from over. Borrowers who had already fixed their loans with NAB will be breathing a sigh of relief at this news, but it will be a very different situation when they come off their fixed rates,” she said.
“When people go to re-fix their loan in one or two years’ time, they could find the majority of rates start with a ‘3’.”
Why are mortgage rates going up?
With ongoing signs the economy is recovering quicker than expected from COVID-19 and signs inflation is picking up, there is growing speculation the Reserve Bank of Australia (RBA) will lift the official interest rate before the forecast date of 2024.
While RBA governor Philip Lowe said the RBA would not be raising rates until wages and unemployment were also within target, that hasn't stopped Australia’s major banks hiking anyway.
What is the lowest rate available now?
Out of the Big Four banks, Westpac has the lowest 1-year fixed rate at 2.24 per cent, followed by ANZ at 2.29 per cent and CBA and NAB equal at 2.49 per cent.
The lowest from all financial institutions in Australia is with Greater Bank or Bank of Us, which has a 1-year fixed rate at 1.59 per cent.
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