Banking recap: NAB cuts fixed home loan rates, plus mortgage trends in March

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NAB has slashed up to 0.55% off its fixed rate home loans as we inch closer to the Reserve Bank of Australia’s (RBA) next meeting in mid-May, and its rates are now giving some smaller lenders a run for their money.

NAB has made sweeping cuts across all of its Tailored Home Loans (Fixed), but the 55 basis point cut comes on the one-year fixed term.

Other adjustments include a 45 basis point cut to NAB’s two-year fixed home loan, bringing the interest rate down to 5.44% p.a. (6.57% p.a. comparison rate*) for those with a loan-to-value ratio (LVR) of under 80%.

Source: Mozo database as at 11 April, 2025. Rates are for an owner occupier with <80% LVR, making principal and interest repayments over 25 years on a $500,000 home loan.

NAB now has the lowest fixed rates among the Big Four following its rate cuts, and not only that, it’s also become seriously competitive among smaller lenders.

For fixed terms over one, two and three years, NAB has now snagged among the top five lowest rates in our database.

That’s all from us for today – thanks for following along and we’ll be back next week.

In the world of home loans, things don't stay the same too long. So I found Corelogic's recent quarterly summary of numbers very helpful.

In short, it shows that borrowers are still active despite difficult economics and, that fortunately, home loan interest rates are trending down.

The numbers also show an increase in owner-occupier home buying and a drop in investor activity.

Here are the key takeaways:

The total value of new home loans rose 1.4% in the December quarter to $87.2 billion, Corelogic reports.

The increase was led by owner-occupiers, with first-home buyer commitments up 1.5% and subsequent owner-occupier loans up 3.5% over the quarter.

Meanwhile, the quarterly value of investor lending fell -2.9% over Q4 but remained 22.2% above the levels seen this time last year.

After rising to a seven year high of 39% in the September quarter, investor lending as a share of total new loan commitments fell to 37% over Q4 2024.

Despite this easing, Victoria and Tasmania were the only states with a lower share of investor lending compared to the decade average, at 30% and 26%, respectively.

The value of first home buyer finance rose 1.5% over the December quarter of 2024 to $16 billion. As a portion of new owner occupier lending, first home buyers comprised 29% in Q4, down from a recent peak of 31% in Q2 2024 (but above the historic decade average of 27%).

The average variable rates for new owner-occupiers (6.09% p.a.) and investors (6.29% p.a.) loans fell -16 and -17 basis points in February following the mid-month rate cut.

Short-term fixed investor rates saw a mild easing, down -7 basis points over the month, while new long-term investor rates rebounded up to 6.91% p.a. following a temporary reprieve in January (6.52% p.a.).

Mozo's numbers can provide further clarity to these figures. Averages in our database are currently 6.43% p.a for variable loans for owner-occupiers (not just new loans), and 6.73% p.a. for investor variable loans (again not just new loans).

For a closer look at what's on offer, be sure to check out some of the leading loans in the Mozo database on our Home Loans hub page.

The Reserve Bank of Australia held interest rates steady in April, but how long will it keep this position?

While inflation has fallen within the target range, the RBA Board needs greater confidence that it’s moving "sustainably towards the midpoint" of its 2-3% target before implementing cuts, says Westpac's chief economist, Luci Ellis.

Ellis notes that while February's meeting acknowledged positive inflation surprises, April's statement emphasised that inflation was merely tracking in line with forecasts. 

During the post-RBA meeting press conference, RBA governor Michele Bullock indicated the Board's confidence grows with each quarter and disinflation remains on track.

Westpac however thinks there will be further rate relief with May emerging as the likely timeframe following another expected inflation drop.

This contrasts with the RBA's February concern that trimmed mean inflation would stall at 2.7% if multiple cuts occurred this year.

The changing economy of recent weeks has played a role.

Global uncertainties, including recent ‘liberation day’ tariff increases from the US, have influenced Australia's economic outlook, although the bulk of the effects still remain unclear.

For more news in banking and finance, head over to our live interest rate tracker

Good morning and welcome back to the Mozo live news blog!

Today we have new spending data, which can help us work out the mood of Aussies in the current economy.

And so, boosted by a lift in recreation and hospitality spending off the back of Melbourne Grand Prix and the return of the winter football codes, household spending is up.

CommBank tracks this each month in its Household Spending Insights (HSI) Index, which it said rose about 1% in March.

Modest gains were seen across all 12 spending categories for the month, led by Education which surged 4.3% amid rising tuition fees and the start of the academic year.

Notable uplifts were also seen in Insurance (+1.6%), Recreation (+1.4%), Hospitality (+1.2%), the latter showing its first lift since December. 

CBA senior economist, Belinda Allen says she expects interest rate cuts over the coming year to see consumers loosen their purse strings [further], but global uncertainty from the US tariffs may impact this recovery.

"While it’s encouraging to see a rebound in spending this March, particularly across discretionary categories like Recreation and Hospitality, it's premature to call this a turning point, as the overall pace of spending growth remains lower than the final quarter of 2024," Allen said.

In a similar report this week, the Australian Retailers Association said it expects spending to increase this month across food, travel and DIY projects, mostly due to the Easter break.

If you're keen to get your savings in order to balance any spending, be sure to check out our Savings Accounts hub page.