Earlier this week, Australia’s third-biggest lender unveiled the new rates on its Tailored Home Loan, slashing up to 108 basis points to bring the advertised rates down to 6.79% p.a. (6.87% p.a. comparison rate*) for owner-occupiers and 7.09% p.a. (7.17% p.a. comparison rate*) for investors. 

The adjusted rates are available to new customers. 

NAB’s Tailored product comes with an offset account and a monthly service fee of $8. It’s available in principal and interest (P&I) and interest-only (IO) repayments with a loan-to-value ratio (LVR) starting at 60% up to 90%. 

NAB brings advertised rates in line with actual rates

The bank’s recent adjustments were less about a rate cut and more of an overhaul of its marketing strategy. 

“We regularly review our home loan pricing for new customers and make changes from time to time that reflect the changing market,” NAB’s spokesperson told InfoChoice.

Through the rate tightening cycle from May 2022, former NAB boss Ross McEwan was explicit in the bank's approach to protect margins rather than grow the loan book.

Andrew Irvine became the new CEO earlier this month.

NAB's latest move aims to bring the products’ advertised rates in line with the actual – and much lower – rates borrowers end up paying. 

Big banks like NAB have been employing this marketing strategy to give them breathing room that allows them to offer customers ‘special’ discounts off artificially inflated advertised rates. 

Australia’s biggest bank Commonwealth Bank (CBA) was the first to overhaul its home loan pricing in November 2022 to bring the advertised rates closer to the actual rates offered. 

In light of the pricing revamp, NAB’s basic variable home loan product remains unchanged at 6.84% p.a. (6.88% p.a. comparison rate*). 

Variable rates trend lower in anticipation of RBA cuts

This week's adjustments put NAB in the company of lenders that have dropped variable home loan rates.

In recent weeks, smaller lenders have begun lowering variable rates following a series of cuts on fixed-rate home loans in previous months.

The latest ABS lending data revealed nearly all (98.56%) mortgages, including refinancing, in February 2024 were variable loans.

Even NAB’s portfolio shows more customers are on variable loans at 76.8% – this figure includes borrowers who signed on to the bank’s Tailored and Basic variable products. 

During the Covid-19 pandemic, when interest rates hit record lows, the value of housing loans on fixed rates peaked at almost 40%, twice their usual share pre-pandemic.

It appears borrowers are opting out of locking into fixed-term loans in anticipation of the RBA slashing the official cash rate sometime this year.

All four major banks' teams of economists expect the current 4.35% benchmark rate to drop in the third quarter, with NAB fully priced for a November rate cut.

NAB variable home loans for owner-occupiers

Here are the new rates of NAB’s Tailored variable mortgage for owner-occupiers

Product

Change

New rate

Comparison rate

Tailored Variable P&I, ≤60%

-78 bps

6.79% p.a.

6.87% p.a.*

Tailored Variable P&I, 60-70%

-78 bps

6.79% p.a.

6.87% p.a.*

Tailored Variable P&I, 70-80%

-78 bps

6.99% p.a.

7.07% p.a.*

Tailored Variable P&I, 80-90%

-78 bps

6.99% p.a.

7.07% p.a.*

Tailored Variable IO, ≤60%

-78 bps

7.26% p.a.

7.07% p.a.*

Tailored Variable IO, 60-70%

-78 bps

7.26% p.a.

7.07% p.a.*

Tailored Variable IO, 70-80%

-78 bps

7.46% p.a.

7.27% p.a.*

Tailored Variable IO, 80-90%

-78 bps

7.46% p.a.

7.27% p.a.*

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
 Featured Online ExclusiveUP TO $4K CASHBACK
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
 Featured APPLY IN MINUTES
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
90%
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) repayments. All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for a 30 year term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. For Interest only loans – the monthly repayment figure is applicable only for the interest only period. After the interest only period, your principal and interest repayments will be higher than these repayments. For Fixed rate loans – the monthly repayment is based on an interest rate that applies for an initial period only and will change when the interest rate reverts to the applicable variable rate.

The Comparison rate is based on a secured loan amount of $150,000 loan over 25 years. WARNING: These comparison rates apply only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees together with costs savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products. Rates correct as of . View disclaimer.

NAB variable home loans for investors

Investors taking out NAB’s Tailored variable home loans get these newly adjusted rates.

Product

Change

New rate

Comparison rate

Investment Tailored Variable P&I, ≤60%

-108 bps

7.09% p.a.

7.17% p.a.*

Investment Tailored Variable P&I, 60-70%

-108 bps

7.09% p.a.

7.17% p.a.*

Investment Tailored Variable P&I, 70-80%

-108 bps

7.29% p.a.

7.37% p.a.*

Investment Tailored Variable P&I, 80-90%

-108 bps

7.29% p.a.

7.37% p.a.*

Investment Tailored Variable IO, ≤60%

-108 bps

7.29% p.a.

7.26% p.a.*

Investment Tailored Variable IO, 60-70%

-108 bps

7.29% p.a.

7.26% p.a.*

Investment Tailored Variable IO, 70-80%

-108 bps

7.49% p.a.

7.46% p.a.*

Investment Tailored Variable IO, 80-90%

-108 bps

7.49% p.a.

7.46% p.a.*

Photo courtesy of NAB

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Bernadette Lunas
Bernadette Lunas
Finance Journalist

Bernadette is a journalist with years of experience covering topics in macroeconomics, real estate, and lifestyle beats for notable print media organisations. She joined the InfoChoice Group in 2024, bringing her passion for writing stories that help Australians make better decisions about money.

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