This article exists as part of the online archive for HuffPost Australia, which closed in 2021.

NAB Raise Home Loan Interest Rates Without Warning

The bank blamed "intense competition, increasing regulation, and elevated funding costs" for the rise.
Owner-occupiers will face an extra $13 a month added to their monthly mortgage payments.
David Gray / Reuters
Owner-occupiers will face an extra $13 a month added to their monthly mortgage payments.

National Australia Bank (NAB) have raised home loan rates by up to a quarter of a percent on Thursday, naming "intense competition, increasing regulation, and elevated funding costs" as the causes of the change.

The bank's variable rate for investment home loans will be increased from 5.55 percent to 5.8 percent and owner-occupiers will see the rates of their loans increase from 5.25 percent to 5.32 percent, effective from March 24.

The shift comes without warning and will see property owners pay more, with owner-occupiers facing an extra $13 a month added to their monthly mortgage payments based on a $300,000 loan over a 30-year-period.

Alternatively, there's good news for Australians looking to break into the property market for the first time with the bank announcing its lowest-ever interest rate for first home buyers.

The increase is sure to be seen as controversial as the housing debate has intensified among potential home buyers around Australia over property costs and the current competitiveness of the market nationally.

NAB Chief Operating Officer Antony Cahill said: "The decisions we make on interest rates are difficult ones, and we want to assure our customers we do not take them lightly as we seek to achieve the right balance for all our stakeholders while considering the dynamic financial and economic environment in which we operate.

"The difference between what we charge and how much it costs us to fund a mortgage remains under pressure, with intense competition, increasing regulation, and elevated funding costs."

The new fixed rate for first home buyers, which is effective immediately will be set at 3.69 percent in a 2-year package for owner occupier, principal and interest loans. Cahill said it will be the lowest rate ever offered by NAB and look to help Australians enter the property market.

"Every dollar counts when you're buying your first home, and this offer for first home buyers will provide real support to Australians wanting to enter the property market," he said.

"This is the lowest home loan rate ever offered by NAB, and it will help Australians entering the property market for the first time to achieve their home ownership dreams."

The rate rise also coincides with the United States Federal Reserve's decision to also raise its interest rates on Thursday, for the second time in three months due to economic and jobs growth.

ALSO ON HUFFPOST AUSTRALIA

Close
This article exists as part of the online archive for HuffPost Australia. Certain site features have been disabled. If you have questions or concerns, please check our FAQ or contact support@huffpost.com.