The announcement follows CBA’s dramatic rate jump
NAB has announced increases to its interest rates, making it the second major Australian bank after CBA to do so.
On Friday, the bank announced immediate rate increases for two of its loan services, the Choice Package and Tailored Home Loan. The rates for one- to five-year loans have gone up by up to 1.1% for both owner-occupiers and investors.
Read more: CBA in dramatic rate hike
While NAB’s rate hike is less extreme than CBA’s, RateCity research director Sally Tindall believed borrowers would still rethink their options in light of the news.
“NAB has pulled the trigger on an extensive round of rate hikes,” she said. “… [Many] borrowers who were looking to fix with NAB are now likely to be reconsidering their options on the back of this news.”
The increase comes ahead of the Reserve Bank’s July board meeting, where rates are expected to rise for the third time in a row, The Australian reported. RBA governor Philip Lowe earlier said a 0.75% rate increase was not on the table but admitted a 0.25% or 0.5% hike could happen.
Tindall doubted the board would go for anything less than a double hike given the current rate of inflation.
“Governor Lowe has said the RBA is prepared to do what it takes to get inflation back into the target band and hiking rates now will send a message that the RBA is on the case. When you consider these points, how could the RBA do anything less?” she said.