Unemployment figures released on Thursday showed the jobs market strengthened in the month of December, with the jobless rate falling to 4.1% - a potential warning sign for inflation.
Inflation and unemployment typically move in opposite directions, and inflation has rebounded above the RBA’s target level of 2% to 3% in recent months.
As such, the drop in unemployment could herald a higher-than-expected December inflation print, due 28 January, ahead of the RBA’s 3–4 February meeting.
That shift may have informed NAB’s latest fixed rate move, as fixed home loan rates are often viewed as a proxy for a lender’s interest rate outlook.
It marks the second time in around a month that NAB has lifted fixed rates, upping many by as much as 20 basis points in mid-December.
Economists at CommBank and NAB have reiterated prior expectations the RBA will hike at its February meeting, while ANZ and Westpac - still tipping a hold - acknowledge the risk of a hike has risen notably following Thursday’s data.
NAB economists hedged the RBA will “be cautious not to overinterpret one data point,” but noted unemployment was already lower than expected prior to December’s numbers.
“Where the RBA may have felt there was a gradual uptrend in unemployment that risked further increases, they will now need to put more weight on the risk of retightening, from a starting point where they already assessed the labour market as too tight,” NAB senior economist Taylor Nugent and associate economist Michael Hayes said.
Market predictions for a February rate hike lifted from a 25% chance of a hike prior to the ABS’s unemployment release to price in a 60% likelihood on Thursday.
How would a rate hike impact mortgage repayments?
The RBA cash rate was cut three times in 2025, dropping from 4.35% to its current 3.60% level.
That saw the typical variable rate on an outstanding home loan fall from 6.3% p.a. in late 2024 to 5.5% p.a. in late 2025.
Such a change would wipe more than $250 from the monthly repayments on a $500,000, 30-year home loan.
A 25 basis point hike in February would see repayments on the same loan regain more than $110 per month.
Would a rate hike impact your repayments? Mortgage Repayment Calculator
NAB lifted fixed rates by as much as 40 basis points
The bank’s Tailored fixed rate home loan now advertises rates as low as 5.79% p.a. (6.24% p.a. comparison rate*) for those with loan-to-value ratios (LVRs) of 80% or less.
The product comes with an $8 monthly fee and allows fixed rate borrowers to make up to $20,000 worth of extra repayments over the course of a fixed term.
NAB’s new fixed rates for owner-occupiers
The latest changes to the bank’s fixed rate line up for owner-occupiers making principal and interest repayments are as follows:
| Fixed period | LVR | Change | New rate | Comp rate* |
|---|---|---|---|---|
| One year | ≤70% | +35bp | 5.74% | 6.10% |
| 70-80% | +35bp | 5.74% | 6.28% | |
| >80% | +35bp | 5.84% | 6.29% | |
| Two years | ≤70% | +40bp | 5.79% | 6.08% |
| 70-80% | +40bp | 5.79% | 6.24% | |
| >80% | +40bp | 5.89% | 6.26% | |
| Three years | ≤70% | +40bp | 5.84% | 6.07% |
| 70-80% | +40bp | 5.84% | 6.21% | |
| >80% | +40bp | 5.94% | 6.24% | |
| Four years | ≤70% | +20bp | 5.99% | 6.11% |
| 70-80% | +20bp | 5.99% | 6.24% | |
| >80% | +30bp | 6.09% | 6.27% | |
| Five years | ≤70% | +30bp | 6.09% | 6.15% |
| 70-80% | +30bp | 6.09% | 6.26% | |
| >80% | +30bp | 6.19% | 6.30% |
NAB’s new fixed rates for investors
The latest changes to the bank’s fixed rate line up for investors making principal and interest repayments are as follows:
| Fixed period | LVR | Change | New rate | Comp rate* |
|---|---|---|---|---|
| One year | ≤70% | +35bp | 5.84% | 6.37% |
| 70-80% | +35bp | 5.84% | 6.55% | |
| >80% | +35bp | 5.94% | 6.56% | |
| Two years | ≤70% | +35bp | 5.89% | 6.34% |
| 70-80% | +35bp | 5.89% | 6.50% | |
| >80% | +35bp | 5.99% | 6.52% | |
| Three years | ≤70% | +35bp | 5.94% | 6.31% |
| 70-80% | +35bp | 5.94% | 6.45% | |
| >80% | +35bp | 6.04% | 6.48% | |
| Four years | ≤70% | +25bp | 6.14% | 6.35% |
| 70-80% | +25bp | 6.14% | 6.48% | |
| >80% | +25bp | 6.24% | 6.52% | |
| Five years | ≤70% | +35bp | 6.24% | 6.38% |
| 70-80% | +35bp | 6.24% | 6.49% | |
| >80% | +35bp | 6.34% | 6.54% |
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