Yahoo Finance NAB bank hikes interest rates 0.3 per cent
NAB has increased its 3- and 4-year fixed rates as Australia’s major banks continue on their rate-hiking campaign.
This marks the second time NAB has increased its 3- and 4-year fixed rates in the last three months, with the new lowest 3-year fixed rate now 2.18 per cent after increasing 0.10 per cent.
For 4-year fixed rates, the new lowest rate at NAB is 2.49 per cent, after increasing 0.25 per cent.
The bank also increased its 5-year fixed rate by 0.30 per cent to 2.79 per cent.
Rate type | Old lowest rate | New lowest rate | Change |
3-year fixed | 2.08% | 2.18% | +0.10% |
4-year fixed | 2.24% | 2.49% | +0.25% |
5-year fixed | 2.49% | 2.79% | +0.30% |
Note: Rates are for owner-occupiers paying principal and interest with NAB’s package loan. NAB also hiked its basic fixed rates for 3, 4 and 5 years.
It comes just weeks after Westpac also increased its 4- and 5-year fixed rates by 0.30 per cent.
RateCity.com.au research director Sally Tindall said that even though Sydney and Melbourne have weeks, if not months, remaining in lockdown, that doesn’t mean banks will hit pause on rate hikes.
“There is widespread agreement this bump in the road is only temporary,” she said.
“[Reserve Bank of Australia] Governor Lowe has made it clear rates will not rise until at least 2024. As a result, many banks are still hiking rates of three years and over, however, cuts to 2-year rates have slowed.”
NAB still has its 2-year fixed rate at 1.99 per cent, in what Tindall believes is a deliberate decision to keep it sub-2 per cent.
“Without this rate the bank could struggle to keep new customers coming in the door in what remains an ultra-competitive market,” Tindall said.
“These fixed rate hikes won’t impact how much someone can borrow, as banks base serviceability tests on the revert rate. However, they do serve as a reminder these rates aren’t going to stick around forever.”
While the Reserve Bank of Australia has kept the official interest rate at its record low 0.1 per cent since November 2020, economists predict the next interest rate move will be up when it does ultimately move in 2024.
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