NAB set to raise home loan rates

NAB set to raise home loan rates
NAB set to raise home loan rates

National Australia Bank is set to raise interest rates for property investors who are paying off principal, as well as interest. 

The rate rise will come into effect on April 4 and be announced to mortgage brokers today, sources told the Street Talk column in The Australian Financial Review.

NAB will lift rates by 0.15 of a percentage point for property investors who are paying off principal, as well as interest. 

The move comes as NAB introduces a new mortgage pricing structure with NAB having its home loan products in four distinct categories. 

Loans will be grouped by both borrower type (owner-occupier or investor) and loan structure (interest-only or principal and interest).

The AFR says it will mark the most differential pricing strategy among the Big Four in the home loan market, contrasting with the "two-tier" mortgage market, which typically now sees investors charged higher rates than owner-occupiers.

Last year NAB lifted rates on interest-only loans, rather than targeting all housing investors which meant there was a minority of property investors at NAB spared the industry-wide crackdown on landlord borrowers

Street Talk noted, the hike is still smaller than NAB's 0.29 percentage point rate rise for all of its interest-only customers of last July, a move that was aimed property investors who favour interest-only loans for the higher tax deductions.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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