Wednesday, 5 November 2008
NAB cuts standard variable mortgage interest rate by 0.62% and its 1 Year Intro fixed rate by 1.00% per annum
National Australia Bank announced today it would reduce its variable mortgage interest rates by 0.62%.
NAB’s standard variable mortgage interest rate will fall from 8.36% to 7.74% per annum and its 1 Year Intro fixed rate will decrease 1.00% to 5.99% per annum.
Ahmed Fahour, Executive Director and CEO Australia, said NAB had given a commitment to its customers that it would pass on as many savings as possible during these economically turbulent times.
“I am pleased we are able to pass on more rate cuts to our home loan customers despite continuing to experience high funding costs. The 1.25% in interest rate cuts we have already delivered, plus this 0.62% decrease, will save customers $5,610 a year or over $467 a month in interest on an average $300,000 loan1,” Mr Fahour said.
“In addition, the 1.00% cut to our 1 Year Intro fixed rate will be one of the cheapest mortgage rates by a bank in Australia at 5.99% per annum.
“We believe in channelling savings back to our customers where possible, so I am pleased the growth in our deposits and the strength of NAB has contributed to us being able to pass on the majority of the decrease at this time.
“The Government’s announcement that it intends to guarantee wholesale funding and domestic deposits gave a confidence boost to the market when it needed it most - consistent with other global announcements. These developments have ensured our strong financial system continues to function well.
“However, the underlying problem our financial system has consistently faced over many decades remains. Australia’s savings gap means we are reliant on borrowing money from offshore wholesale markets which are still frozen and very expensive. This imbalance is putting pressure on all banks’ funding costs and at NAB we continue to monitor this closely to ensure we are being balanced in our pricing decisions.
“NAB is committed to passing on lower rates as much as it can to customers as these markets improve and banks’ funding costs fall, as we did in October.”
Mr Fahour said while the market remained volatile around the world, NAB’s long-standing commitment to helping customers achieve their financial goals remained strong, despite the economic turmoil.
NAB’s business customers who are on bill-based loan products (which represent the majority of NAB’s lending to business and agribusiness customers) will automatically get the full benefit of the drop in bank bill rates as they did last month. In addition variable business lending rates will reduce by 0.40% per annum.
NAB will also be reducing its consumer and business credit card rates by up to 0.75% per annum.
In addition, NAB will be reducing some of its variable deposit account interest rates by up to 0.75% per annum.
NAB’s new 1 Year Intro fixed rate of 5.99% per annum will become effective Monday, 10 November 2008 and NAB’s new standard variable mortgage rate of 7.74% per annum will become effective Friday, 14 November 2008.
Luisa Ford NAB Corporate Affairs M: +61 (0) 411 024 104
* The information contained in this media release is for media advice purposes only. The contents are true and correct at time of publishing/issuing, however may change over time. For further information about NAB products or rates, please go to Interest Rates, Fees & Charges