NAB cuts mortgage rates by 0.20%

By Leith van Onselen

The National Australia Bank (NAB) are the first major to cut mortgage rates in response to yesterday’s 0.25% cut to official interest rates by the RBA, lowering their standard variable mortgage rate by 0.20% to 6.38%. From Property Observer:

NAB has announced that it will pass on 20 basis points out of the 25 basis points cut from the cash rate by the RBA yesterday.

The bank’s standard variable home loan rate will fall from 6.58% to 6.38% per annum on December 10 – the lowest of the major banks with the Commonwealth Bank (6.6%) and Westpac (6.71%) yet to make an announcement on rates and ANZ (6.6%) making its independent decision on Friday, December 14.

NABs head of personal banking, Lisa Gray said the rate cut delivers on its pledge to offer the lowest standard variable home loan rate of the major banks for 2012 – however the bank did not say whether it would continue with this pledge in 2013…

Gray said its decisions on interest rates were not taken lightly and the bank sought to strike the right balance between the cost of funding and offering competitive rates to customers.

 

 

Comments

    • Probably for the best.

      I honestly can’t see any other way that ‘the powers that be’ will ever be convinced to take action on exchange rates outside the normal.

      Cutting rates doesn’t work, when every competing currency is at 0%, or near enough, and printing.

      Our treasury definitely needs to be sitting in the corner with a dunces cap.

    • I don’t see the banks would want to play a race to the bottom game. They’re all happy with the status quo.

      I play a different game. I offer my family a higher rate for their savings if they open up an ‘account’ with me. Thus lowering my rate, and increasing theirs. Everybody wins… except the banks and the tax department.

  1. 6.38%, with a Cash Rate of 3%?! NZ has an OCR of 2.5%, yet our variable rates are at 4.75% ish….So plenty of headroom for the same banks, me thinks….

      • But do they still need to compete? With the A$ looking like it’s going to attracte a swag of off-shore funding, who needs domestic savings! (Just ask us, in NZ. Our savings base is insignificant, because we don’t need to compete. You guys, and other ‘foreigners’ give us all the funds we need….Now I’m sure there’s a trap in there somewhere….)

      • Domestic deposits. Safe as houses (heh!) in their eyes. Overseas funding. Can disappear on a whim. Better to pay a little more and have a solid base than quicksand that goes in a flash the minute the bells ring.

      • But the whole point of the exercise is to MAKE Australia borrow the QE’d funds. Australia’s part in solving the USA’s problem is to assume more debt, and import funds , thereby pushing up the A$ and reinvigorating the USA by ‘giving’ it a lower currency. I must say; Australia! You’re playing your part rather well……

  2. reusachtigeMEMBER

    I so hope people take money out of the banks and put it under their pillow. That will teach them to lower deposit rates! Then they’ll have to borrow more from OS. LOL

  3. Does anyone actually pay bank Standard Variable Rate? Or is it a marketing tool simply to demonstrate discounts elsewhere?