NAB maintains lowest standard variable mortgage rate of big four banks, for ninth consecutive month

Wednesday, 3 March 2010

Following the Reserve Bank of Australia’s Board Meeting yesterday, National Australia Bank confirmed its variable home loan interest rates would increase by 0.25% per annum, in line with the RBA.

NAB’s new standard variable rate will be 6.74% pa, effective Friday, 5 March 2010.

NAB will also increase interest rates on a range of consumer deposits by up to 0.90% pa from Friday, 5 March 2010; and a range of business deposit and variable business lending interest rates by 0.25% pa from Monday, 8 March 2010. NAB’s broker brand, Homeside, will also increase variable home loan rates by 0.25%, effective Friday, 5 March 2010.

Consumer Deposits Current rate New rate (From 5/03/10 )
NAB iSaver 3.50% pa 3.75% pa
NAB iSaver Introductory Rate
(accounts opened 11/5/09 – 13/04/10)1
5.15% pa 5.40% pa
NAB Smart Junior Saver Base 1.00% pa
Bonus 2.10% pa
Base 1.00% pa
Bonus 3.00% pa
Home Loans Current rate New rate (From 5/03/10 )
NAB Tailored Home Loan
(standard variable rate)
6.49% pa 6.74% pa
Choice Packages - $250k+
(packaged variable rate)
5.79% pa 6.04% pa

Lisa Gray, Group Executive NAB Personal Banking, said: “In the last month we have seen a surge in the number of Australians approaching NAB for a home loan. The uplift is across all our home loan brands, including an 100% uplift in applications in the broker market via our Homeside brand.

“In addition, we have welcomed around 35,000 new NAB Classic transaction account customers since we abolished monthly account service fees back in January. That’s a 25% increase in the number of Australians joining our fight against unfair banking.

“We attribute this to not only having had the most competitive standard variable rate for nine consecutive months, but also to the fact that Australians are recognising that NAB is looking to do things differently and bring more competition and choice for bank customers,” Ms Gray said.

NAB’s overall funding costs are expected to increase into 2010, driven mainly by the rising average cost of term wholesale funding and higher retail deposit costs. NAB takes this forecast into consideration in all interest rate decisions.

“There are a number of factors we need to consider when setting our interest rates, and the forecast on funding costs will be one we will be watching closely to ensure we maintain a sustainable competitive position. We will maintain our commitment to being transparent with all of our interest rate decisions,” Ms Gray said.

The key drivers of NAB's cost of funds (PDF, 84KB)

Notes to Editor:

  • In February 2010, NAB’s home loan volume growth was four-times greater than February 2009.
  • NAB’s standard variable home loan rate has been the market leader since June 2009.
  • NAB standard variable customers with an average $300k home loan will be up to $68 per month better off than customers of other major banks.
  • NAB was the only major bank not to go above the official cash rate rise in December 2009 and last month, was the only bank to reassure its customers it would not increase home loan interest rates by more than the official cash rate in February.
  • Since January 2010, NAB has experienced a 22% decrease in the number of transaction account customers leaving the Bank.

NAB’s leadership position on bank fees

Bank fees abolished or cut by NAB:

  • Abolish $4 and $5 monthly account service fees on NAB’s most popular everyday personal transaction accounts: Classic and e-Banking (effective January 22, 2010)
  • Abolish $30 overdrawn account fees on all personal transaction and savings accounts (effective September 1, 2009)
  • Abolish $25 over-limit fee on all NAB credit cards (effective December 4, 2009)
  • Cut $30 late payment fee on all NAB credit cards to $5 (effective December 4, 2009)

Business fees abolished:

  • Abolish $13 Inward Dishonour Fee charged for dishonoured cheques received (effective February 1, 2010)
  • Abolish $60 Outward Dishonour Fee charged when funds are insufficient to cover cheques or electronic payments drawn on an account (effective February 1, 2010)
  • Abolish $50 Periodical Payment Deferral Fee charged when they are insufficient funds to meet a recurring payment (effective February 1, 2010)
  • Cash Handling Fee of 0.25% of total charged for cash amounts greater than $5,000 that are withdrawn or deposited over the counter in one day (effective February 1, 2010)
  • Overdrawn (Reference) Fee – we’ve introduced a $1000 buffer which will eliminate 65% of all overdrawn fees currently charged to small business customers (effective 1 May, 2010)

Other bank fees abolished effective January 22, 2010:

  • Abolish $3 branch withdrawal and $1 cheque withdrawal fees on e-Banking accounts
  • Abolish $6 monthly account service fee on Clear Banking accounts
  • Abolish monthly account service and transactions fees on Passbook accounts
  • Abolish monthly account service and transaction fees on 7 other transaction accounts

Other initiatives:

  • Joined forces with rediATM to create one of Australia’s largest ATM networks so customers can avoid paying additional ATM fees in over 3,100 locations (effective late-2009).

Media contacts:

Luisa Ford, NAB Corporate Affairs – M: 0411 024 104
Gillian Griffiths , NAB Corporate Affairs – M: 0419 667 783

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