NAB shaves rates to assist first time home buyers

NAB has cut fixed and variable rates on a number of home loan products, aiming to attract more first time buyers.

NAB has cut variable home loan rates. Picture: Hollie Adams

NAB has slashed fixed and variable rates on a number of home loan products, a move it says is designed to assist first-time buyers.

The bank carved 15 basis points off its base variable rate to cut it to 2.69 per cent. The discount is available if the loan to value ratio is 80 per cent or less.

NAB and Westpac now offer the lowest variable rate of the four major banks. Commonwealth Bank is offering a variable rate of 2.79 per cent, while ANZ is advertising a variable rate of 2.72 per cent.

According to RateCity, eight fixed rate home loan products at NAB have had a 10 basis point chop, with a two-year fixed rate on owner occupied loans starting from 2.19 per cent.

Westpac and NAB are both advertising two-year fixed rates at 2.19 per cent, while similar fixed rate loan products at ANZ and CBA begin at 2.29 per cent.

Residential investors will be able to obtain a two-fixed rate at 2.49 per cent at NAB.

NAB executive of personal banking, Rachel Slade said the new low rates would assist Australians looking to buy their first home through the first home loan deposit scheme.

“NAB is pleased to continue partnering with the Federal Government and the National Housing Finance and Investment Corporation (NHFIC) to help customers purchase their first home via the scheme in the next financial year,” Ms Slade said.

On July 1 NAB will be offering a new round of places for the loan deposit scheme, which allows first time home buyers to access a loan with less held capital.

Eligible first home buyers on low and middle incomes can purchase a loan with little as 5 per cent deposit.

“It’s great to see so many Australians purchase their first home sooner than they expected, even at a time when the coronavirus crisis has impacted the housing market,” Ms Slade said.

RateCity research director Sally Tindall said NAB’s decision to slash rates is the latest move in an interest rate war that is yet to show any clear signs of bottoming out.

“The home loan rate war is great news for mortgage holders in a position to refinance, with some of the lowest rates Australia has ever seen,” Ms Tindall said.

“They’ve all seen the spike in refinancing and want to make sure they get their fair share of business - particularly as new home lending is falling.”

According to RateCity’s database, Reduce Home Loans is offering the lowest variable rate at 2.19 per cent, if the condition of an 80 per cent loan to value ratio or less is held.

HSBC and ING are both offering the lowest two-year fixed rate at 2.09 per cent.