NAB Cuts Fixed Rates as Lenders Eye RBA Decision

NAB has cut fixed home loan rates by up to 0.20%, adding to a wave of fixed-rate reductions across 21 lenders ahead of the RBA's August 10-11 cash rate decision.

NAB has reduced its short-term fixed home loan rates by up to 0.20 percentage points, bringing its two-year fixed rate to 6.34% per annum — putting it among a growing list of lenders moving rates ahead of the Reserve Bank of Australia's next meeting on August 10-11.

According to MPA Australia, 21 lenders have cut at least one fixed rate since 1 June, reflecting a broad market view that the cash rate is at or near its peak. ANZ trimmed select fixed rates by up to 0.10 percentage points over the period, while Macquarie cut its fixed rates by as much as 0.50 percentage points. Not all lenders moved in the same direction: Westpac lifted its one- to three-year fixed rates by 0.05 percentage points, and 11 lenders in total raised at least one fixed rate in the same period.

Where the Big Four Stand on Fixed Rates

Among the major banks, ANZ holds the sharpest-priced two-year fixed rate at 6.29%, while CBA, Westpac, and NAB sit at 6.34% for the same term. The gap between lenders widens across longer terms, with NAB now pricing its five-year fixed rate at 6.49%, compared to Westpac's 6.69% and CBA's 6.79%.

Here is how the big four compare across fixed terms for owner-occupier loans:

| Term | CBA | Westpac | NAB | ANZ | |------|-----|---------|-----|-----| | 1-year | 6.49% | 6.44% | 6.44% | 6.34% | | 2-year | 6.34% | 6.34% | 6.34% | 6.29% | | 3-year | 6.59% | 6.54% | 6.49% | 6.49% | | 4-year | 6.64% | 6.69% | 6.49% | 6.54% | | 5-year | 6.79% | 6.69% | 6.49% | 6.59% |

*Rates for owner-occupier fixed-rate loans. LVR requirements apply. Source: MPA Australia.*

The cuts are not limited to the big four. Non-bank lender Firstmac has reduced rates across its entire fixed and variable home loan range, with its five-year fixed rate taking the deepest reduction — down 40 basis points to 6.99% per annum for owner-occupiers and 7.19% for investors. Two-year fixed rates are down 15 basis points to 6.74%, three-year rates by 25 basis points to 6.74%, and four-year rates by 30 basis points to 6.99%. Variable rates across Firstmac's Simple, Standard, and Construction home loan ranges have also been trimmed by 10 basis points.

Firstmac chief executive Marie Mortimer said the five-year fixed option was about more than the rate reduction itself, pointing to the lender's serviceability policy as a practical tool for borrowers with tighter borrowing capacity.

"Our five-year fixed loan gives brokers another practical option, while giving customers certainty over their rate and repayments," Mortimer said.

Firstmac manages $22 billion in residential mortgages and has written more than 210,000 home loans in its 47-year history, making it one of the larger non-bank players in the Australian market.

Should You Consider Fixing Your Rate Right Now?

Fixed rates above 6% are not cheap by historical standards, and industry analysts have noted that most borrowers are unlikely to rush to lock in while so much uncertainty remains around the RBA's next move.

Economists are split on what comes next. Westpac continues to forecast two further cash rate increases — one at the August 10-11 meeting, pushing the cash rate to 4.6%, and a potential second in September. CBA, NAB, and ANZ hold the opposing view that the cash rate has already peaked at 4.35%. All four major banks, regardless of their near-term outlook, expect the RBA to begin cutting rates next year.

Two key economic data releases are due before the RBA's August meeting: the June quarter Consumer Price Index on July 29 and the ABS Labour Force figures. Both are expected to be significant in shaping whether the board moves or holds.

For borrowers weighing up whether to fix, the honest reality is that no one can reliably predict when rates will peak or turn. The more useful question is whether rate certainty has practical value for your household budget right now. If knowing exactly what your repayments will be over the next two or three years would give you peace of mind or help you plan, there may be a case for locking in — even at current levels.

If you have not reviewed your home loan recently, it is worth comparing what is available in the market right now to check whether your current rate still stacks up. A refinance savings calculator can help you put a dollar figure on what switching might save you over time.

One important caution if you do fix: make sure you understand what rate your loan reverts to when the fixed term ends. Rolling off onto a high revert rate without a plan in place can quickly erode any savings made during the fixed period. Start thinking about your next move at least three months before the expiry date — not after it arrives.