NAB cuts fixed rates for owner-occupiers, investors as ‘door open’ to official interest rates decrease next year

Big four bank NAB has cut its fixed rates for customers by up to 0.65 percentage points, as lenders anticipate a cash rate cut next year.

The bank has chopped its owner-occupier principal and fixed interest rates by up to 0.5 percentage points, and investor and owner-occupier interest-only fixed rates by up to 0.65 percentage points, according to rate tracking by Canstar.

WATCH THE VIDEO ABOVE: Reserve Bank Board releases interest rate decision.

It follows Macquarie Bank’s move last week to slash a range of fixed rates by up to 0.4 percentage points to 5.39 per cent — and could be a sign more rate cuts are to come.

Homeowners are anxiously awaiting the Reserve Bank of Australia (RBA) to drop interest rates from the 13-year high of 4.35 per cent.

Central banks in the United States, Canada and New Zealand are among those that have reduced interest rates, but the RBA maintains Australia is in a different boat.

The minutes from its September meeting confirmed there was no explicit discussion of the case to hike interest rates.

ANZ head of Australian economics Adam Boyton said the minutes represented a “clear step down in the RBA board’s hawkishness”.

“This leaves the door open to a shift to neutral by the end of this year and then easing in early 2025,” he said.

Canstar data insights director Sally Tindall believes NAB “certainly won’t be the last” bank to cut fixed rates.

NAB’s owner-occupied loans have fallen between 0.55 and 0.1 percentage points.

The most significant change was for the bank’s two-year fixed loan, which dropped from 6.59 per cent to 6.04 per cent.

The bank’s lowest three-year fixed rate of 5.89 per cent is now in line with Commonwealth Bank and Westpac, while ANZ’s offers above 6 per cent.

More than 37 lenders have dropped at least one fixed rate over the last month, according to Canstar research.

Australian Bureau of Statistics lending data shows just two per cent of new and refinanced loans in August opted for a fixed rate.

“Other lenders — both big and small — are likely to cut fixed rates in coming weeks as competition in this space starts to finally defrost,” Tindall said.

For fans of the “security and assurance” that can be associated with a fixed rate mortgage, Tindall said more fixed rate cuts could come in the months ahead.

“On the other hand, if you’re someone looking for the security a term deposit can bring, know that these rates are also likely to keep on falling in the months ahead,” she said.

“For these savers, it might be a matter of moving sooner rather than later.

“The difference between a competitive rate, and a woeful one, has the potential to have a significant impact on your finances.”

- With AAP