NAB has thrown down the gauntlet to the other two majors, after raising its variable mortgage rate by just 25 basis points – in line with the Reserve Bank.
The bold move from NAB flies in the face of some other majors who have been citing higher funding costs as a driver for moving their rates above the official cash rate.
Westpac was the first bank to move after the RBA announcement, upping its standard variable rate by 45 basis points.
From today, NAB customers will pay a standard variable rate of 6.49 per cent compared to Westpac’s 6.76 per cent, which equates to a saving of $51 per month on a $300,000 mortgage.
NAB’s decision to raise rates by the same amount as the Reserve Bank has opened up the biggest mortgage rate gap between the majors on record.
Lisa Gray, group executive NAB personal banking, said the last time there was such a wide gap between the majors was “decades ago.”
“We are determined to be competitive, to offer our customers a better deal and attract new customers to NAB. Today we are sending a message to customers at Westpac, and the other banks, that NAB can offer them a better deal,” Ms Gray said.
“NAB has offered the cheapest standard variable interest rate amongst the major banks for the past six months and the new rate of 6.49 per cent p.a. is likely to remain unbeaten amongst the major banks.
“We have been very considered with this announcement given funding costs and the cost of raising deposits continues to fluctuate and is expected to increase further. However we believe that improving our reputation and relationships with our customers and the community is core to the long term sustainability and success of our business.”