Some homeowners will be hit with higher mortgage costs from the end of this month, as the National Australia Bank raises its interest rates for both owner-occupiers and investors with variable home loans.
From January 31, owner-occupiers making principal and interest repayments will be hit with a 0.12 per cent rate rise, while the rate for those with interest-only loans and investors will increase by 0.16 per cent.
The bank said an owner-occupier with a $300,000 home loan on a 30-year term would pay an extra $22 each month in principal and interest repayments — or $264 each year.
In a statement, NAB executive Mike Baird said the decision was “not taken lightly” and that the bank was balancing the interests of shareholders and customers and “sustained increases in funding costs”.
“We have been deliberate in our approach to limit the impact on owner-occupier borrowers by keeping their rates as low as possible to encourage both new and existing customers to pay down their loan sooner,” Mr Baird said.
NAB previously left its rates unchanged when the other major banks increased theirs in September last year.
The interest rate hike comes ahead of the release of the banking royal commission’s final report, which is due to be handed to the Governor-General by February 1.
NAB shares rose slightly following the announcement to be 0.1 per cent higher at $24.54 by 2.10pm (AEDT).