In a bold move amidst global economic uncertainty, the National Australia Bank (NAB) has announced significant cuts to its fixed home loan rates, positioning itself as a frontrunner in the mortgage market. As of April 11, 2025, NAB's lowest advertised fixed rate stands at 5.39% per annum for a three-year term, targeting borrowers with a loan-to-value ratio (LVR) of 70% or less.
This strategic decision comes as NAB economists predict that the Reserve Bank of Australia (RBA) will initiate substantial cuts to the cash rate as early as May 2025. They foresee a bold forecast of a 0.50 percentage point reduction, bringing the cash rate down to 3.60%. Following this, further cuts of 0.25 percentage points are anticipated in July, August, November, and February, potentially lowering the cash rate to 2.60% by early next year.
Despite these optimistic predictions from NAB, RBA governor Michele Bullock expressed caution regarding the future of interest rates. In her address at the Chief Executive Women annual dinner on April 10, 2025, she stated, "It’s too early for us to determine what the path will be for interest rates. Our focus remains on our dual mandate for price stability and full employment." Bullock's remarks suggest a more measured approach to monetary policy, diverging from NAB's aggressive forecasts.
NAB's recent cuts include a range of fixed-rate options. For owner-occupiers with an 80% LVR, the one-year fixed rate has dropped by 0.55% to 5.54%, while the two-year fixed rate has decreased by 0.45% to 5.44%. The three-year fixed rate, which now sits at 5.39%, has also seen a reduction of 0.45%. Additionally, the four and five-year fixed rates have been set at 5.79% each. Investor fixed rates have been adjusted as well, with reductions of up to 0.50% depending on the term and loan-to-value ratio.
The backdrop to these developments includes a volatile week for global markets, largely influenced by uncertainties surrounding U.S. trade policies. Recently, President Donald Trump announced a temporary 90-day moratorium on some tariffs, excluding those on China. This announcement spurred a rebound in global markets, with the U.S. S&P 500 posting some of its strongest gains since the 2007-09 recession.
As NAB moves forward with these rate cuts, they join other major banks in evaluating their mortgage offerings. However, in a contrasting move, Suncorp, owned by ANZ, has opted to increase its variable rates by two basis points for certain products. Their Back to Basics Better Together loan now offers a rate of 5.90% per annum (5.91% comparison rate) for borrowers with an LVR of 60% or less.
Here's a closer look at NAB's newly tailored fixed home loan rates:
| Product | % Change | New Rate | Comparison Rate |
| --- | --- | --- | --- |
| Owner Occupier 1 Year P&I 80% LVR | -0.55 | 5.54% p.a. | 6.70% p.a. |
| Owner Occupier 2 Years P&I 80% LVR | -0.45 | 5.44% p.a. | 6.57% p.a. |
| Owner Occupier 3 Years P&I 80% LVR | -0.45 | 5.39% p.a. | 6.44% p.a. |
| Owner Occupier 4 Years P&I 80% LVR | -0.40 | 5.79% p.a. | 6.48% p.a. |
| Owner Occupier 5 Years P&I 80% LVR | -0.45 | 5.79% p.a. | 6.41% p.a. |
| Investor 1 Year P&I 80% LVR | -0.50 | 5.69% p.a. | 6.98% p.a. |
| Investor 2 Years P&I 80% LVR | -0.40 | 5.59% p.a. | 6.83% p.a. |
| Investor 3 Years P&I 80% LVR | -0.40 | 5.59% p.a. | 6.71% p.a. |
| Investor 4 Years P&I 80% LVR | -0.40 | 5.99% p.a. | 6.74% p.a. |
| Investor 5 Years P&I 80% LVR | -0.45 | 5.99% p.a. | 6.66% p.a.* |
As the financial landscape continues to shift, NAB's aggressive approach to rate cuts may provide homeowners with significant savings, while also reflecting a broader trend in the banking industry. The upcoming months will be crucial for both borrowers and lenders as they navigate the uncertain waters of economic policy and global market fluctuations.
In summary, NAB's decision to cut rates comes at a time when many are looking for relief from high borrowing costs. With predictions of further reductions in the cash rate, homeowners may find themselves in a more favorable position to refinance or secure new loans. However, the caution expressed by RBA governor Bullock serves as a reminder that the economic environment remains unpredictable.
As borrowers weigh their options, the contrast between NAB's proactive stance and Suncorp's recent rate increase highlights the competitive nature of the mortgage market. With rates fluctuating and economic indicators shifting, consumers are urged to stay informed and consider their financial strategies carefully.
