In a surprise move, National Australia Bank has confirmed it will keep its standard variable mortgage rates on hold at 5.24 per cent.
It was widely expected that NAB would follow the lead of Westpac, ANZ and the Commonwealth Bank, which imposed out-of-cycle rate hikes in the past couple of weeks.
In a statement, NAB said that if home loan rates had increased by 15 points (0.15pc), a customer on a $500,000 mortgage would have had to pay an extra $47 per month.
“We are listening and acting differently,” NAB chief executive Andrew Thorburn said.
“We need to rebuild the trust of our customers, and by holding our NAB Standard Variable Rate longer, we help our customers for longer.”
This decision means NAB will have to bear the rising costs of wholesale funding, which its competitors have blamed for causing them to increase home loan rates.
It will also cut into the bank’s profit and net interest margins — which is essentially the difference between a bank’s interest income and the amount of interest it pays out to lenders.
Based on the new rates, comparison website RateCity has calculated that NAB customers would repay less than $20,000 per year — based on a $300,000 standard variable, owner-occupier, principal and interest loan:
