NAB bank dramatically cut interest rates for millions of Australians: Here’s how much you’ll save

A major Australian bank has slashed variable mortgage rates even though borrowers have missed out on relief from the Reserve Bank. 

NAB has reduced its base rate for owner occupiers by 40 basis points, taking variable rates down to 6.44 per cent.

But it is far from the lowest variable rate from a Big Four bank, with ANZ offering 6.14 per cent and the Commonwealth Bank charging 6.15 per cent on their digital-only home loans.

NAB’s latest reduction is a sign of more intense competition from the major banks, even though Reserve Bank of Australia Governor Michele Bullock has hinted at another possible rate rise. 

Canstar data insights director Sally Tindall said while the NAB offer was only for new customers, it meant borrowers with the major banks had leeway to negotiate a better deal on their loan.

‘If you’re an existing customer, there’s absolutely nothing stopping you from picking up the phone and asking for a rate cut,’ she said.

While the major banks are offering variable rates starting with a ‘six’, a Canstar analysis showed 38 smaller lenders with variable rates below that level.  

The Reserve Bank of Australia this month left the cash rate on hold at 4.35 per cent, with borrowers missing out on relief despite the U.S., UK, Canada, European Union and New Zealand already cutting rates this year. 

Australia’s Big Four banks are now expecting the RBA to start cutting rates in February. 

But the 30-day interbank lending market doesn’t see relief starting until August, with traders now only expecting one rate cut in 2025.

In October, the market was expecting four rate cuts from the RBA.