In a move that has caught the attention of prospective homeowners, a major financial institution has made a significant announcement that could ease the financial burden for many.

Its recent decision reflects a broader trend of organisations responding to the evolving needs of consumers.

This change aims to boost those navigating the property market and offer a welcome surprise for future homebuyers.


The National Australia Bank (NAB) has just rolled out what could be described as an early Christmas present for home buyers across the country.

In a surprising twist, NAB has slashed its three-year fixed rate on home loans by a significant 0.6 per cent, bringing it down to an attractive 5.99 per cent.

This bold step offers a glimmer of hope to those struggling to secure their dream homes and positions NAB as a trailblazer among the ‘big four’ banks in Australia.


For many Australians, the dream of homeownership has felt increasingly out of reach amidst rising property prices and interest rates.

However, NAB's decision to offer a loan product with a ‘five’ at the front is a game-changer, especially considering that the Commonwealth Bank's Unloan offerings were the only other exception.

According to RateCity, this rate cut is the first of its kind from a major bank this year, and it's a strategic move that's sure to capture the attention of prospective buyers, particularly those who are concerned about the possibility of further cash rate hikes.


According to RateCity Research Director Sally Tindall, ‘This is a strategic move from NAB in a bid to test whether there's any appetite among borrowers to revert back to fixing.’

‘A big bank fixed rate that starts with a 'five' is likely to turn at least a few heads, particularly among those worried about the prospect of further cash rate hikes.’

‘The popularity of fixed rates peaked back in July 2021 when 46 per cent of new and refinanced loans opted for a fixed rate, according to the ABS.’

‘This now sits at just 1.7 per cent in the most recent data,’ Ms Tindall continued.

‘It's hard to see people flocking back to fixed rates, but this rate under 6 per cent from NAB is designed to test this.’

‘However, fixing for three years is a big financial commitment at any time, but particularly when the future of the cash rate remains highly uncertain,’ she added.


The rate reduction applies exclusively to the three-year fixed-rate loan for owner-occupiers who are repaying both principal and interest.

Borrowers need to have at least 30 per cent equity in their property, resulting in a loan-to-value ratio of 70 per cent or less.

Currently, NAB’s competitors—Commonwealth Bank, Westpac, and ANZ—offer three-year fixed rates of 6.59 per cent.

For five-year fixed rates, Commonwealth Bank and Westpac provide loans at 6.69 per cent, while NAB offers 6.79 per cent and ANZ 6.84 per cent.


Ms Tindall noted that a fixed rate could provide borrowers with some stability, reducing the need to constantly monitor changes in the Reserve Bank of Australia's cash rate, which influences interest rates across the economy.

‘RBA Governor Michele Bullock has said the cash rate is in “restrictive territory”, which means it's likely to come down at some point; however, not even the RBA knows exactly when that will be, by how much, and whether we're likely to see more hikes before then,’ she explained.

‘For those looking for some relief from having to follow the RBA's every thought, a fixed rate could be the certainty they need, even if they end up having to pay more for that peace of mind.’


Ms Tindall then proceeded to say, ‘For those looking to pay the least amount of interest possible, it could end up being a gamble between a highly competitive variable rate and a short-term fixed one.’

‘The RateCity.com.au database shows the lowest one-year fixed rate is sitting at 5.74 per cent, while the lowest variable is just 0.01 percentage point higher at 5.75 per cent.’

‘There's barely a crack of light between the two rates, but a couple of cash rate changes either way would change this equation entirely.’

‘Borrowers considering a fixed rate should know these loans are a lot less flexible, with caps on extra repayments and typically no access to an offset account.’

‘Short-term fixed rates can also be a lot more work as you'll need to renegotiate your loan, or potentially refinance at the end of the fixed rate period.’

‘The last thing you want to do is roll over onto a highly uncompetitive variable rate after the fixed rate term expires,’ she added.


While the recent rate cut from NAB offers a promising break for homebuyers, there are additional strategies that can help reduce mortgage costs further.

For those looking to maximise their savings, experts have identified a key question that could lead to significant reductions in mortgage payments.

Understanding these insights can provide valuable tools for managing and minimising home loan expenses in the long run.
Have you considered fixing your home loan rate, or do you prefer the flexibility of a variable rate? Share your thoughts and experiences in the comments below!