NATIONAL Australia Bank has decided to follow moves by two of the other big banks and raise its home loan rates.
NAB will increase the interest rate on all new and existing variable rate home loans by 0.17% p.a. to 5.60% p.a., effective Thursday, 12 November.
In a statement, NAB says the moved “responds to market conditions, as well as regulatory changes that require NAB to increase the amount of capital applied to residential mortgages.”
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NAB Group Executive for Personal Banking Gavin Slater said the NAB had carefully considered the decision to raise interest rates.
“There are a range of factors that come into consideration in interest rate decisions. The home loan market is dynamic, with multiple changes being seen across the industry,” Mr Slater said.
“Regulatory changes on capital requirements also increase the costs associated with providing home loans. In May this year, NAB took early steps to strengthen our capital position by raising $5.5 billion to begin to address expected changes in capital requirements.
“Today’s decision has not been easy, but we believe this is right decision for the long term. We know we have to balance the interests of our customers with the needs of our more than 550,000 shareholders.
“Interest rates are at historically low levels and NAB remains committed to providing a competitive proposition for our customers.
“We appreciate that price is important, but we also know that customers want us to provide the right help and advice, the right products, and deliver innovative digital capability.”
There are no changes to fixed rates, with NAB having cut its two, three and four-year fixed home loan rates earlier this year.
Yesterday, Commonwealth Bank Australia announced it will lift its standard variable mortgage rate for owner-occupiers by 0.15 percentage points to 5.6 per cent on November 20.
It follows Westpac’s move to raise its standard variable rate by 0.2 percentage points to 5.68 per cent.