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Home loan rate roundup: NAB leading Big 4 banks on rate cuts

NAB is now offering an increased discount on its Base Variable Rate home loan, while Canstar has seen a number of other rate movements over the past week, particularly for investors.

Homes in Hobart

This month, NAB reduced the interest rate on its Base Variable Rate home loan for owner occupiers making principal and interest (P&I) repayments by 48 basis points from 4.17% to 3.69% per annum (comparison rate of 3.74% p.a.*).

Canstar’s Group Manager of Research and Ratings Mitch Watson said this rate change is part of a broader trend among the major banks.

“The additional discount of 48 basis points off the current advertised rate brings NAB’s basic variable loan down to 3.69%p.a., making this the lowest variable rate currently on offer from the big 4 banks, and continues the recent trend of the majors who are aggressively pricing their basic home loans for owner occupiers,” he said.

Earlier this month NAB announced a 50 basis point rate cut on its Choice Package Tailored Fixed and Private Tailored Package Tailored Fixed five-year fixed rate home loans for owner occupiers paying principal and interest to 4.09% per annum (comparison rates of 4.79%* and 5.12%* respectively).

NAB’s new home loan rates

Rates based on residential home loans available for a loan amount of $350,000 at 80% LVR. Table sorted by current rate.

CUA hikes rates for owner occupiers

Over the past week, Canstar’s database saw CUA increase interest rates by up to 43 basis points on its owner occupier home loans.

CUA’s Fresh Start Basic Owner Occupier interest-only home loan increased 43 basis points from 3.99% to 4.42% per annum (comparison rate of 4.09% p.a.*), while its P&I equivalent increased by 8 basis points from 3.99% to 4.07% p.a. (comparison rate of 4.09% p.a.).

CUA also hiked rates on its Fresh Star Access Owner Occupier loan by 15 basis points from 4.31% to 4.46% p.a. (comparison rate of 4.48% p.a.*).

Rates based on residential home loans available for a loan amount of $350,000 at 80% LVR. Table sorted by current rate.

Investor home loan rates slashed

The past week also saw the reduction to investor loan interest rates continue, with AMP Bank making large reductions to its package variable home loans and People’s Choice Credit Union reducing rates for its fixed rate investor loans.

Mr Watson said these banks join an array of others making similar changes recently.

“AMP have been the big movers this week, lowering rates on its suite of investment loans by up to 75 basis points, joining the likes of ANZ, Heritage and NAB who have also announced rate reductions for investors in the last couple of weeks,” said Mr Watson.

“Repricing of investment loans could be seen as a signal that some lenders have seen a significant drop off in investment activity in recent months.

“With their loan books now below the APRA-imposed investment lending growth caps, these lenders appear keen to recover some of the lucrative investment lending market that they have been forced to shed since the caps were imposed.”

Investment variable rate changes

Variable Investor Home Loan Product Level Changes between 20/03/2018 to 26/03/2018 (%)
Company Product  Old Rate New Rate Change Comparison Rate*
AMP Bank Affinity Package Investment Variable IO 250-749k 4.99 4.48 -0.51 4.37
AMP Bank Affinity Package Investment Variable IO 750k+ 4.99 4.34 -0.65 4.29
AMP Bank Professional Package Investment Variable IO 250-749k 4.99 4.48 -0.51 4.66
AMP Bank Professional Package Investment Variable IO 750k+ 4.99 4.34 -0.65 4.57
AMP Bank Professional Package Investment Variable P+I 250-749k 4.94 4.24 -0.70 4.6
AMP Bank Professional Package Investment Variable P+I 750k+ 4.94 4.19 -0.75 4.55
AMP Bank Select Package Investment Variable IO 250-749k 4.99 4.48 -0.51 4.68
AMP Bank Select Package Investment Variable IO 750k+ 4.99 4.34 -0.65 4.59
AMP Bank Affinity Package Investment Variable P+I 250-749k 4.94 4.24 -0.70 4.28
AMP Bank Affinity Package Investment Variable P+I 750k+ 4.94 4.19 -0.75 4.23
AMP Bank Select Package Investment Variable P+I 250-749k 4.94 4.24 -0.70 4.62
AMP Bank Select Package Investment Variable P+I 750k+ 4.94 4.19 -0.75 4.57
Beyond Bank Special Low Rate Investment Home Loan 4.59 4.49 -0.10 4.51
Source: Canstar.com.au. Rates based on loans available for $400,000 at 80%LVR. *Comparison rate based on a loan amount of $150,000 over 25 years.

Investment fixed rate changes

Fixed Investor Home Loan Product Level Changes between 20/03/2018 to 26/03/2018 (%)
Company Product  Old Rate New Rate Change Comparison Rate*
People’s Choice Credit Union Investment Fixed P&I 1 yr 4.69 4.49 -0.20 5.86
People’s Choice Credit Union Home Loan Package Investment Fixed P&I 1 yr 150k+ 4.54 4.34 -0.20 5.44
People’s Choice Credit Union Investment Fixed P&I 2 yrs 4.44 4.34 -0.10 5.71
People’s Choice Credit Union Home Loan Package Investment Fixed P&I 2 yrs 150k+ 4.29 4.19 -0.10 5.34
People’s Choice Credit Union Investment Fixed P&I 3 yrs 4.49 4.39 -0.10 5.59
People’s Choice Credit Union Home Loan Package Investment Fixed P&I 3 yrs 150k+ 4.34 4.24 -0.10 5.27
Source: Canstar.com.au. Rates based on loans available for $400,000 at 80%LVR. *Comparison rate based on a loan amount of $150,000 over 25 years.

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