NAB announces plans for home loan rates

NAB announces plans for home loan rates
Date of Publication: Wednesday, 02 May 2012 11:49

National Australia Bank (NAB) was the first of the ‘Big Four’ banks to announce its plans in response to the Reserve Bank’s central interest rate cut on Tuesday. It will pass on only 64% of it to its customers.


The bank announced that it would be cutting its standard variable home loan rate by 32 basis points, from 7.31% to 6.99%.


On a typical $300,000 mortgage, this represents a saving of roughly $65 per month.


This follows the Bank of Queensland’s prompt move to cut its standard variable rate by 35 basis points, or 0.35%. ANZ has said that it will make decisions on May 11th, the second Friday of the month.


While NAB currently holds the lowest standard variable rate of the major banks, it remains to be seen how well consumers react to the decision to withhold 36% of the Reserve Bank’s interest rate cut.


Group Executive Lisa Gray said that NAB would remain committed to offering the lowest rates of the major banks throughout 2012. The bank has already announced a dip in profits owing to losses made through its UK operations, Clydesdale Bank and Yorkshire Bank.


"The European debt crisis is having an impact on the global and domestic economy. By maintaining the lowest standard variable rate of the major banks, we have sought to continue to shield our customers from global economic instability", she said.


However, with the ‘Big Four’ still on course to announce record profits for the first half of 2012, are banks still able to justify retaining a large chunk of the RBA’s rate cut?


Bret Clement

Wednesday, 02 May 2012 11:49
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