The National Bank of Australia (NAB) has implemented a range of cuts in fixed and new customer variable rates, chasing down Westpac Australia on home loan rates.

NAB, Australia’s third largest bank, has dropped its lowest variable rate by 0.15% to 2.69%, and its lowest fixed rate by 0.10% to 2.19%.

The latest cuts have placed NAB’s home loan rates, along with Westpac’s, as the lowest among the big four. However, NAB customers only need a 20% deposit for the rates whereas Westpac requires a 30% deposit.  

NAB rate changes – owner-occupiers

Home loan Old rate New rate Change
Base variable rate 2.84% 2.69% 0.15%
Choice package fixed rate – 1 yr 2.39% 2.29% 0.10%
Choice package fixed rate – 2 yr 2.29% 2.19% 0.10%

Note: rates are for owner occupiers paying principal and interest for new customers or customers who switch to fixed

NAB rate changes – investors

Home loan Old rate New rate Change
Choice package fixed rate – 1 yr 2.69% 2.59% 0.10%
Choice package fixed rate – 2 yr 2.59% 2.49% 0.10%

Note: rate changes are for investors paying principal and interest

Data from revealed that more than 330 fixed rate home loan rates have been cut, while almost 160 variable rates for new customers have dropped since 1 May.

Sally Tindall, research director, said NAB was determined to stay competitive to keep new business cycling through the door.

“It’s game on between the banks,” she said. “Thursday’s cuts from NAB are the latest move in an interest rate war that’s yet to show any clear sign of bottoming out.”

Tindall added that all eyes are now on Commonwealth Bank of Australia (CBA) and Australia and New Zealand Banking Group (ANZ) to see “if they will take the bait and follow suit.”

“They’ve all seen the spike in refinancing and want to make sure they get their fair share of business. Particularly as new home lending is falling,” she said. “The home loan rate war is great news for mortgage holders in a position to refinance, with some of the lowest rates Australia has ever seen.”

Big Four Bank lowest rates

Lender Advertised variable Advertised 2-yr fixed Advertised 3-yr fixed
CBA 2.79% 2.29% 2.29%
Westpac 2.69%* 2.19%* 2.19%
NAB 2.69% 2.19% 2.29%
ANZ 2.72% 2.29% 2.29%

Note: Rates are for owner occupiers paying principal and interest.

*Westpac’s rates are for customers with a loan-to-value ratio of less than 70%