Big four bank’s decision spells doom for borrowers

The bank today increased its fixed short-term lending rate by 0.15 percentage points.

The lowest fixed-rate option is now well above six percent and amounts to 6.49 percent for a five-year term. This surprise move could spell doom for borrowers hoping for some relief.

The RBA increased the cash rate to 4.35 per cent, resulting in an additional $227 to $453 added to average monthly mortgage repayments.

Canstar Data Insights director Sally Tindall said NAB’s decision shows the rate hike cycle among Australian lenders has a long tail.

“Fixed interest rates are often a window into what banks think is going to happen,” Tindall said.

“NAB’s decision to lift short-term fixed rates signals that it is not ready to rule out further rate hikes, even as the RBA will almost certainly go on hiatus next month.”

Mortgage holders should brace themselves for a difficult second half of the year.

Tindall said borrowers are unlikely to get lucky in the near future.

“The reality is that interest rates are likely to remain high for the foreseeable future and could move up one or two notches,” she added.

The RBA will meet again next month on June 15 and 16

According to Canstar data, Westpac leads the big four banks with the lowest fixed rate loans on offer, with an interest rate of 6.29 per cent for a two-year term.

The lowest interest rate outside the major lenders is still just under six percent.

Norther Inland, Pacific Mortgage Group and Transport Mutual offer a one-year fixed term loan at 5.99 per cent – ​​the only three lenders with fixed rates below six.

At the beginning of 2026, there were 83 lenders that offered at least one interest rate increase of less than six percent.

However, the pace of home lending has not slowed despite the renewed impetus of buyer fear in the real estate market.

Total home loans reached a record high of $2.48 trillion in April.

Figures from the Australian Prudential Regulation Authority (APRA) show home loans to depository institutions (ADIs) increased by $14.3 billion last month, up 0.6 per cent on the previous month.