NAB agrees to cut rates quicker

National Australia Bank (NAB) home loan customers will receive future interest rate cuts within five days of reductions in official rates.

Australia's major banks are often criticised for profiting from delays in passing on reductions in official interest rates to existing customers.

Historically, the delay is between 12 and 21 days. Interest rate increases are often passed on immediately. The interest paid by banks declines when the Reserve Bank of Australia decreases official rates, so it is profitable for banks to delay passing on these reductions to customers.

The NAB also said all reductions in official interest rates will be passed on to customers in full.