NAB passes on 20 basis points and trims standard variable rate to 6.58%

Larry SchlesingerDecember 8, 2020

Following nearly three days of silence NAB has reduced its standard variable home loan rate by 20 basis points to 6.58% p.a.

NAB will also reduce its rate on standard variable business rate lending products by 0.2 percentage points p.a.

Both new rates are effective from Monday, October 8.

The banks says it has offered the lowest SVR of the major banks for the past 39 months, saving borrowers $1,800 in interest compared with those who have a standard variable loan with another major bank.

But borrowers will be upset that the bank has not passed on the full 25 basis points on offer following Tuesday’s cash rate cut.

NAB has maintained its promise of having the lowest standard variable rate of the major banks throughout 2012.

Soon after the NAB announcement, the Commonwealth Bank said it would also pass on 20 basis points to variable mortgage holders, reducing its SVR to 6.6% from October 12.

Were ANZ to pass on 23 basis points or more at its independent interest rates meeting next Friday it would surpass NAB's 6.58% offering.

Westpac cut its SVR by 18 basis points to 6.71% effective from October 15.

NAB group executive for personal banking, Lisa Gray, said decisions on interest rates were not taken lightly and NAB had sought to strike the right balance between offering the lowest SVR of the major banks and its obligations to ensure Australian banks are safe and secure.

"Banks obtain funds for lending from deposits and from wholesale funding markets. Around the world, banking regulators require banks to hold more stable forms of funding, like deposits, to reduce risk in the banking sector,” says Gray.

"The increased competition for deposits is pushing up costs, making it more expensive to fund our lending.

“The decision we have taken today means we can continue to offer competitive deposit rates while delivering on our pledge to have the lowest SVR of the major banks for 2012.”

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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