NAB is the first big bank out of the blocks to announce it will pass on today’s 0.25 percentage point RBA rate hike in full to variable borrowers, effective Friday, March 27.
As a result, NAB’s lowest variable home loan rate will be 6.19%.
NAB is yet to announce changes to its savings rates.
NAB lowest variable home loan rate, effective 27 March | |
|---|---|
Old rate from | New rate from |
5.94% | 6.19% |
Source: Canstar. Rates are for owner-occupiers paying principal and interest. LVR requirements apply.
Here’s what happens now for NAB customers
While NAB will start charging customers the higher mortgage rate in 10 days time, it will give borrowers plenty of notice before it increases their minimum monthly repayment and associated direct debit.
In the case of an increase to customers’ minimum monthly repayments, the big four banks provide the following:
- CBA: a minimum of 20 days’ notice
- Westpac, NAB and ANZ: a minimum of 30 days’ notice
Exactly when a customer’s repayments will rise will also depend on how long it takes the banks to issue the repayment change letter and where the customer is in their billing cycle. This can take up to two or three months in some cases.
How to get ahead of a rate hike
Variable rate borrowers don’t just have to accept a higher mortgage rate. These rates are negotiable. The first port of call for borrowers should be to contact their bank and ask for a rate cut.
If a borrower can drop their rate by 0.25, then they will have effectively mitigated the impact of today’s hike. A personalised rate cut of 0.50, will mitigate the impact of the February hike as well.
What will a good rate now look like?
Once the dust settles on this hike, Canstar estimates:
- 6.01% will be the average owner-occupier variable rate.
- 5.75% will be a competitive owner-occupier variable rate, on offer from an estimated 40+ lenders.
- 5.50% is likely to be one the lowest variable rates on Canstar.
What kind of buffer do Australians currently have?
Many borrowers are ahead on their repayments, cushioning them against the February and March rate hikes, and potentially, one further hike in May, which all of the big four banks are forecasting.
- RBA data shows Australians paid $15.0 billion in excess mortgage payments in the December quarter of 2025. This was the highest level since September 2021.
- APRA data shows balances in offset accounts are at a new record high of $343.5 billion in the December quarter of 2025. This now represents 12.3% of all credit outstanding.
- NAB data shows 80% of its variable borrowers kept their monthly repayments the same after all three rate cuts in 2025.
- CBA data also showed the vast majority of its variable borrowers kept their repayments the same after the cuts in February, May and August.
Canstar’s data insights director, Sally Tindall, says, “The RBA just hiked by another 0.25 percentage points. We’re now back to the second highest cash rate setting we’ve seen in the last 14 years.”
She added, “NAB is the first cab off the rank, matching the RBA’s cash rate hike for variable borrowers.
“Rate hikes are never welcome news for borrowers, but NAB has at least been upfront with its mortgage customers.
“It’s likely only a matter of time before the other major banks follow suit, and history suggests they won’t hesitate to pass on the full increase.
“For many households already walking a budgeting tightrope, this latest hike will sting.
“However, there is a silver lining for some NAB customers. Many didn’t reduce their repayments after the rate cuts in 2025, which means while interest costs will rise in the coming days, their direct debits may not automatically increase.
“If you are paying the minimum, NAB will automatically increase this repayment and the associated direct debit, however, it will send you a letter outlining these changes and give at least 30 days’ notice before that money comes out of your account.
“What remains unclear is how NAB will treat its savers, and that uncertainty is concerning. It raises the possibility the bank may not pass on the full benefit of this hike across all savings products.
“In a rising rate environment, banks tend to be selective about which savings accounts get a boost and which are left behind.
“Savers have been resilient in the face of three rate cuts last year, managing to stash away record piles of cash for a rainy day. Now, NAB should do the right thing and pass this hike on in full to these customers.”
