NAB changes interest rates on home loans and deposits

8 October 2009

National Australia Bank announced today it would increase interest rates on a range of deposit and home lending products by 0.25% per annum

NAB's new consumer deposit rates and new standard variable rate will be effective Monday, 12 October 2009. NAB will also be increasing a range of variable business lending and business deposit rates by 0.25% pa on Monday, 12 October 2009.

Consumer Deposits Current rate New rate
(From 12/10/09)
NAB iSaver 2.75% pa 3.00% pa
NAB iSaver Introductory Rate
(accounts opened 11/5/09 – 12/01/10)1
4.40% pa 4.65% pa
Home Loans Current rate New rate
(From 12/10/09)
NAB Tailored Home Loan (standard variable rate) 5.74% pa 5.99% pa
Choice Packages - $250k+ (packaged variable rate) 5.04% pa 5.29% pa

Key facts:

  • Nine out of 10 NAB variable rate home loan customers are on a discounted package. NAB Choice Packages of $250k+ are 0.70% pa less than NAB’s standard variable rate.
  • The majority of NAB customers are ahead of their minimum monthly home loan repayments.
  • On an average $300k loan in October 2008, households were paying around $540 per week in interest. Once the new rates become effective, NAB customers will pay around $346 per week in interest. This is a saving of $194 per week compared to the same time last year.
  • At this time last year the major banks standard variable rate ranged from 9.33% pa to 9.37% pa.

Lisa Gray, Group Executive NAB Personal Banking, said NAB’s decision to change interest rates on both variable home loan and deposit products was a reflection of a rise in the official cash rate.

"We take a number of factors into consideration when determining interest rates and the cash rate is one of those. We also consider money market conditions, term funding costs, the cost of raising deposits and the competitive market. Overall, the average cost of funding a home loan continues to rise.

"Our current variable interest rates remain highly competitive and even once our new rates come into effect, they still remain at historically low levels," Ms Gray said.

In September NAB was the first major bank to abolish overdrawn account fees on all its personal transaction and savings accounts. NAB continues to be the only bank to have completely abolished these fees. NAB also recently doubled its ATM network to help its customers avoid ATM direct charge fees.

The key drivers of NAB's cost of funds (PDF, 78kb)

Media contacts:
Luisa Ford

Gillian Griffiths

NAB Corporate Affairs

NAB Corporate Affairs

M: 0411 024 104

M: 0419 667 783

Footnotes

  1. Refer to nab.com.au for terms and conditions.