Big bank increases mortgage rate

NAB and Macquarie have today joined 15 other lenders in hiking their four and five year mortgage rates.

NAB will increase its four and five year fixed term rates by up to 0.25 per cent for owner-occupier loans with principal and interest repayments.

Macquarie Bank has also increased the rate on its four and five year fixed rates by up to 0.30 per cent for owner occupiers and investors.

At the same time, the bank reduced its variable rates for owner occupiers and investors by up to 0.40 per cent.

The fixed rate increases see both NAB and Macquarie Bank join 15 other lenders that have increased longer term fixed rates since the start of April.

This includes both Westpac and Commonwealth Bank but not ANZ which is now the only Big Four to not increase fixed rates this year.

“The banks have been reducing fixed home loan rates for months and have now moved their focus from offering ultra-low longer four and five year rates to the more popular two and three year rates,” Canstar’s Steve Mickenbecker said.

“Higher long term rates help fund the skinny short term rates.

“Economic recovery is in the air, driving longer term fixed interest rates up, and the sky high budget spending will provide further impetus to this trend.” research director, Sally Tindall, said this hike from NAB means there are now no big banks offering four-year rates under 2 per cent.

“At the start of the year, 25 lenders were offering at least one four-year fixed rate under 2 per cent. Now there’s just three, and they’re probably not going to keep these rates long,” she said.

“Banks are shutting the door on record low four- and five- year rates. Three-year rates are likely to be next, potentially in the second half of this year.”

Tindall said four-year fixed rates are likely going to be less popular going forward now that many of the ultra-low rates are off the table.

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