By: Jessica Darnbrough
All the majors hiked their rates by 25 basis points within hours of the RBA's decision yesterday to increase the cash rate to 4.5 per cent.
CBA was the first off the mark, bumping up its mortgage rates by a quarter of a per cent just minutes after the cash rate increase was announced. Westpac, ANZ and NAB then followed suit, leaving the gap between the major's variable rates at 27 basis points.
NAB’s group executive personal banking Lisa Gray said while funding costs were expected to remain high in 2010, driven mainly by the rising average cost of term wholesale funding and higher retail deposit costs, the bank was determined to stay in line with the RBA.
Ms Gray said the bank was focused on a long term commitment to providing a fairer value exchange to customers.
"We’re delighted our fair value philosophy is starting to pay dividends given we’re seeing more home loan customers join NAB than we’ve seen in years,” she said.
“In February and March, we outgrew financial system in home lending - the first time we’ve had two consecutive months of growth above system since mid-2005.
"We attribute this to two factors: firstly, by providing Australians with highly competitive interest rates – including the best standard variable home loan interest rate of the major banks for 11 consecutive months; and secondly for committing to stand for something different.
"Our fight against unfair banking is getting noticed and Australians are signing up to join us.”
Effective from 7 May, NAB will have the cheapest standard variable rate of all the majors at 7.24 per cent, followed by CBA at 7.36 per cent and ANZ at 7.41 per cent. Westpac’s standard variable rate will continue to be the most expensive rate among the majors at 7.51 per cent.
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