NAB raises mortgage rates
SYDNEY: National Australia Bank (NAB) became the first of the country’s Big Four lenders to raise mortgage rates yesterday, a move that in part will be welcomed by regulators desperate to cool runaway real estate prices.
NAB, Australia’s No. 4 lender by market value, raised interest rates on residential investment loans by 25 basis points to 5.80 per cent to clamp down on the “strong growth” in the segment, it said in a statement.
But it also raised owner-occupier loans by seven basis points to 5.32 per cent, a move that analysts said could draw flak from consumers and politicians.
Earlier this week, a senior central banker signalled regulators were ready to impose tighter lending restrictions to ward off risks in a housing market that has seen prices grow at their fastest since 2010.
Home prices in major cities jumped 11.7 per cent in the year through February, while in Sydney they have shot up 18.4 per cent.
While authorities should welcome moves to dampen speculation in property, high loan rates for home occupiers could risk hurting the broader economy at a time when it still needs support. Reuters