 Fixed rate home loans increased
National Australia Bank has lifted fixed rate interest levels, following other big banks with increases to most fixed rate products.
Customers looking to fix their home loan rate with NAB for one year will find an increase of 50 basis points, as the rate climbs up to 6.59 per cent. The two-year fixed loan is being increased by 40 basis points up to 7.29 per cent.
And the five year fixed interest loan will rise by 0.2 per cent to 7.89 per cent.
All major banks are looking to protect themselves from rising rates over the life of the loan, and with financial markets all predicting official interest rates will rise by as much as 2 per cent over the coming two years, lenders are acting now to prepare for the increases.
Last week the Commonwealth Bank, Westpac and ANZ all lifted fixed rate loans and NAB says they held off for as long as they could.
They reflect anticipated movement in the money market rather than directly echoing the interest rate rises decided by the Reserve Bank.
"Fixed interest rate loans are based on what the market expects,'' said NAB spokeswoman Luisa Ford.
One of National Australia Banks biggest rivals, ANZ bank, have been vocal about rate changes with ANZ chief executive Mike Smith remaining sceptical over the Reserve Bank strategy of raising interest rates saying the economy is not necessarily ready for rate increases.
Date may be coming through suggesting that the economy is improving, with house prices increasing and job advertisements rising, but Mr Smith still believes the economy is fragile.
He has spoken out saying ANZ does not want to increase mortgage rates by more than official RBA increases.
Money market fluctuations prompted big rises to fixed rate home loans last week, with the major banks lifting pricing for new customers by as much 1 per cent.
All of the Big Four have now moved to raise fixed rates as well as variable rates, leaving home owners confused over whether to fix their mortgage interest rate now, or remain on a variable rate loan.
Commonwealth Bank was the first to move in raising fixed rates.
The Reserve Bank meets every month for a policy meeting and on October 6 moved to raise the official cash rate by 25 basis points to 3.25 per cent.
Lenders moved to increase variable rates by the same amount within days of the RBA announcement.
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