In a welcome move, the National Australia Bank (NAB) has reduced fixed mortgage rates for owner-occupiers and investors, offering relief from rising expenses during the cost-of-living crisis in Australia.
Investor and owner-occupier interest-only fixed rates have been slashed by up to 0.65 percentage points, while owner-occupier principal and interest fixed rates have been lowered by up to 0.50 percentage points, Nine News reported, citing Canstar data.
Owner-occupiers who pay principal and interest and have a 40% deposit or more can now access NAB’s lowest fixed rates, which are 5.89% and are thought to be the biggest rate drop to date.
NAB’s rate adjustments were the second such move in just two and a half months, hot on the heels of Macquarie’s fixed-rate reductions last Thursday.
Notably, the Reserve Bank of Australia (RBA) has kept its interest rates unchanged despite pressure from homeowners seeking relief from high mortgage repayments. The RBA’s decision is influenced by its assessment that Australia’s economic situation is unique, differing from countries like the U.S., Canada, and New Zealand, which have reduced interest rates, 7 News reported.
ANZ head of Australian economics Adam Boyton interpreted RBA’s minutes as a “clear step down in the RBA board’s hawkishness.”
“This leaves the door open to a shift to neutral by the end of this year and then easing in early 2025,” he said.
Canstar’s Data Insights Director, Sally Tindall, said NAB’s recent rate cuts were just a groundwork for a larger development with additional lenders expected to follow suit. The revision levels NAB’s three-year fixed rate with Commonwealth Bank and Westpac at 5.89%, while ANZ’s rates stay above 6%.
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