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Last of the big four cuts rates to undercut peers
NAB has updated its mortgage serviceability assessment policy, becoming the final big four bank to amend its policy in response to APRA’s new guidance.

Last of the big four cuts rates to undercut peers
NAB has updated its mortgage serviceability assessment policy, becoming the final big four bank to amend its policy in response to APRA’s new guidance.

National Australia Bank (NAB) has lowered its interest rate floor to 5.5 per cent and increased its interest rate buffer to 2.5 per cent, effective for all new home loan applications from 5 August.
The bank’s announcement has seen it undercut its major competitors, CBA and Westpac, which only dropped their rates to 5.75 per cent.
The new NAB rate floor aligns with ANZ’s announcement that it was lowering its rate floor to 5.5 per cent.
As it stands, Macquarie has the lowest floor rate (5.3 per cent), with MyState on the opposite side of the spectrum, dropping its floor rate to just 6.2 per cent.
The revisions have been in response to the Australian Prudential Regulation Authority’s (APRA) changes to home lending guidance, in which the authority scrapped the 7 per cent interest rate floor for mortgage assessments and increased the buffer rate to 2.5 per cent.
Commenting on the changes, NAB’s chief customer officer for consumer banking, Mike Baird, told Nest Egg’s sister publication, The Adviser, that “NAB welcomes the updated APRA guidelines on home lending serviceability”.
“We believe now is the right time to change the approach to how the affordability rate floor is determined, given the continuing low interest rate environment,” he said.
Mr Baird added, “As a responsible lender, serviceability is assessed using a number of factors and we consider all lending applications on a case-by-case basis.”
NAB is the latest lender to amend its serviceability policy, joining the likes of ANZ, Westpac, the Commonwealth Bank, Macquarie, Suncorp, MyState Bank, Bendigo and Adelaide Bank, the Bank of Sydney, and Auswide Bank.
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