Melbourne-headquartered National Australia Bank (NAB) is discounting key homebuyer rates by 142 basis points in its first rate move since last week’s revelations about mortgage fraud at the Royal Commission.
NAB, which has a roughly 15% share of the mortgage market, is heavily discounting principal-and-interest owner-occupier loans to 3.69%. The new rate is a 1.42% discount off the current advertised rate for the base variable-rate home loan.
The bank relies on brokers to recommend about 42% of its mortgages, compared to about 50% for the other members of the Big Four and more than half for non-majors, according to analysis by Morgan Stanley.
NAB’s latest rate cut follows those made by Commonwealth Bank of Australia (CBA) and Westpac to interest-only borrowing. These banks are readjusting their loan books after overestimating the impact of the Australian Prudential Regulation Authority’s (APRA) lending caps.
Lenders are tightening lending terms and conditions in line with APRA’s requests as they simultaneously cut rates on key products to attract borrowers who meet their stricter criteria for assessing income and spending.
Also read: Banks loosen the screws on interest-only lending
Collections: Mortgage News NAB
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