Home Finance & Economy NAB reduces mortgage discount for new customers

NAB reduces mortgage discount for new customers

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As of today, NAB will cut the discount it offers to new mortgage customers. The lender will reduce the discount for new customers from 0.48 to 0.30 percentage points. The rate on offer to new principal and interest borrowers will increase from 3.69% to 3.87%.

Existing customers, on the other hand, will go unaffected, as the existing discount and standard variable rate remains unchanged at 5.24 percent. Mr. Andrew Thorburn, the Chief Executive Officer of NAB, said in a statement that the bank values its existing customers.

“We’ve got almost a million home loan customers at NAB,” says Mr Thorburn, “and we’re signalling to them that we appreciate your loyalty, we appreciate your business, and we want to keep this rate on hold for as long as we can to acknowledge that.”

It was revealed last week that the full-year profit of NAB declined from 14.2 percent to $5.7 billion following huge expenditure related to customer remediation and restructuring.

Amid this difficult time in Australia’s financial markets, it is inevitable that this downturn will be passed on to consumers. Though the Reserve Bank of Australia holds its rates steady, these out-of-cycle changes from Australia’s other banks are hitting first-home buyers the hardest.

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Predictions of potential RBA rate increases in 2019 would impact first-home buyers and existing mortgage-holders alike.