NAB last of the Big Four to cut interest rate floor

NAB made changes to its home loan serviceability assessment policy, dropping its interest-rate floor to 5.5 per cent and increasing its interest-rate buffer to 2.5 per cent.

The changes are effective for all new home loan applications from 5 August.

The changes came after APRA revised its home-lending guidance, abolishing the 7 per cent interest-rate floor for mortgage assessments and raising the buffer rate to 2.5 per cent.

It is the last of the Big Four to tweak its serviceability policy with the other three announcing revisions and cuts earlier in July.

NAB has matched ANZ’s rate floor of 5.5 per cent.

They beat out their Big Four peers CBA and Westpac, who dropped their floor rates to 5.75 per cent.

Westpac was the first of the Big four to make the cut.

All four increased the buffer rate to 2.5 per cent.

Macquarie currently has the lowest interest rate floor at 5.3 per cent.