NAB has given the introductory rate loan market a much-needed lift by offering the lowest one-year fixed introductory loan of the major banks.
The new rate of 6.25% has been lowered from 6.49% and is a bid to give first homebuyers confidence to enter the housing market. Introductory or 'honeymoon rate' loans have traditionally been used by first homebuyers as a means of saving on interest payments during the early part of their loan. A low rate can free up cash for other expenses such as mortgage insurance, conveyancing fees and moving costs.
Warren Shaw, NAB's general manager of mortgages, said the rate would attract first homebuyers to the bank. "The 6.25 one-year fixed introductory rate home loan is a very competitive offer and will assist first homebuyers in reducing their borrowing costs for their new home," he said.
Key features of the new rate include the ability to make additional repayments of up to $20,000 during the fixed rate period and a choice of weekly, fortnightly or monthly repayments. After the first year introductory period, the 6.25% fixed rate switches to NAB's standard variable rate.