NAB, Australia’s third largest lender, has increased its fixed rates following a similar move from CBA.
NAB hiked fixed rates for owner-occupiers and investors by up to 1.1 percentage points, after CBA lifted its fixed rates in all categories by 1.4 percentage points.
Analysis from the RateCity.com.au database showed 70-plus other banks have hiked at least one fixed rate in the last month, aside from the two big banks.
“NAB has pulled the trigger on an extensive round of rate hikes,” said Sally Tindall, RateCity.com.au research director. “While the hikes aren’t quite as large as CBA’s, many borrowers who were looking to fix with NAB are now likely to be reconsidering their options on the back of this news. CBA and NAB are not hiking in isolation. ANZ, Macquarie, and HSBC have all made sizeable fixed rate hikes in the last fortnight and we expect others will follow. Westpac’s fixed rates are now well below the other big four banks’ rates, however, they’re unlikely to last long.”
Tindall said the rate changes were in response to the rising cost of fixed-rate funding, as well as to market expectations that the cash rate will go beyond the RBA’s suggested neutral cash rate of 2.5%.
“Governor [Philip] Lowe has said the board will be considering both a 0.25 percentage point hike and another double hike of 0.5 percentage points at Tuesday’s meeting,” she said. “It’s hard to see the RBA opting for anything less than a double hike at this stage. 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?”
