NAB hikes rates for owner-occupiers and investors by as much as 0.6 per cent

A major Australian bank has announced increases to its interest rates in a move that will have borrowers worried.

NAB says it’s hiking interest rates by as much as 0.6 per cent for some borrowers in more bad news for homeowners.

The banking giant said it would increase fixed interest rates for both owner-occupiers and investors.

The changes apply to NAB Choice Package and the Tailored Home Loan.

Homeowners with the NAB Choice Package on a one-year fixed rate will see their rate go up by 0.6 per cent, while those with a two-year fixed rate will see a 0.3 per cent rise.

People on three-year fixed rates will see those go up by 0.55 per cent, borrowers with four-year fixed rates are in for a 0.4 per cent increase, and those with five-year rates will see a 0.4 per cent hike.

The banking giant said it would increase fixed interest rates for both owner-occupiers and investors. Picture: NCA NewsWire / John Gass

For investors, the increases will be 0.4 per cent for those with one or two-year fixed rates and 0.55 per cent for those with rates fixed for three, four or five years.

The rate hikes are similar for those with the Tailored Home Loan.

The new rates will apply to anyone wishing to change from a variable to a fixed-rate loan on or after Friday.

“We are starting to see more and more lenders basing their pricing on clients equity and lending to value ratio and therefore the lenders own risk,” CBM Mortgages owner Craig McDonald said.

“The three-year fixed rates on offer now are almost treble what was being offered six months ago and the banks are factoring in a few cash rate increases into that offering and the gap between variable and fixed has increased significantly.”

The latest rate hike comes a day after the Treasurer delivered a sombre update on the nation’s coffers.

Jim Chalmers downplayed concerns Australia could be headed for a recession before presenting his economic update to the House of Representatives on Thursday.

Mr Chalmers revealed inflation was expected to peak at 7.75 per cent by the end of this year – up from the previously anticipated 4.25 per cent.

This was one of several relatively dramatic changes to the economic forecasts produced by Treasury before the federal election.

The forecast for gross domestic product growth in 2022-23 will be revised down from 3.5 per cent to 3 per cent.

Economic growth is expected to slow further in 2023-24 at 2 per cent – down from the 2.5 per cent previously predicted.