NAB ups ante in mortgage contest

A NEW front has opened in the multi-billion dollar lending war with one of the major banks to slash its four-year fixed term home loan rate to its lowest level in 20 years.

A NEW front has opened in the multi-billion dollar lending war with one of the major banks today slashing its four-year fixed term home loan rate to its lowest level in 20 years.

National Australia Bank will lower its key four-year fixed home loan package rate by 0.2 per cent to 5.44 per cent.

This is its lowest point since September 1993.

It will also cut its three-year fixed home loan by 0.05 per cent to 5.14 per cent.

It signals an intensification of the battle between the banks to be seen as consumer champion.

NAB can now brag it has the lowest rate on one-, two-, three- and four-year fixed home loans.

The move follows figures last week showing the share of new home loans by first home buyers had dropped to the lowest level since the Australian Bureau of Statistics started keeping figures in 1991.

The NAB cuts also come as banks fight for every customer after the Reserve Bank slashed the official rates to a 50- year low of 2.5 per cent in August.

With little expectation the RBA will cut rates this year, the great debate over whether to lock-in low mortgages is set to re-emerge.

"We know that now is the time people are looking to get their finances in order as they plan for the year ahead, especially­ those looking to buy their first home,'' NAB personal banking boss Gavin Slater­ ­said.

"We're really proud of our commitment to remain competitive and continuing to offer the best products with the best deals and the best service."

NAB kicked-off a war for customers on Valentines Day 2011, when it declared it was "breaking up'' with the rest of the Big Four.

"NAB has led the industry in making banking fairer and simpler for customers for more than four years through measures such as the abolition of numerous fees and offering competitive rates," Mr Slater said.