NAB Increases Variable Home Loan Rates Following RBA Cash Rate Hike

National Australia Bank (NAB) has implemented a 0.25% per annum increase to its variable home loan interest rates, effective Friday, May 15, 2026. This adjustment follows the Reserve Bank of Australia's (RBA) decision earlier this month to raise the official cash rate, marking a significant shift in the monetary policy landscape for the current year. The move by the bank is a direct response to the central bank's efforts to curb persistent inflationary pressures that have remained above target levels through the first half of the year.

The RBA lifted the official cash rate by 0.25% to 4.35% per annum on Tuesday, May 5, 2026. This decision represented the third consecutive cash rate hike in 2026, a sequence that has now fully unwound the rate easing measures implemented throughout 2025. The tightening cycle has been driven by a necessity to address headline inflation, which was recorded at 4.6% for the year ending March 2026. RBA Governor Michelle Bullock indicated that the tightening was necessitated by high inflation fueled by the Middle East conflict, excess demand, and significant spending across both the government and private sectors.

Impact on Australian Mortgage Holders

The pass-through of the RBA's rate hike to variable home loan products is expected to place further financial pressure on Australian households. For a borrower with a $600,000 mortgage, the 0.25% increase translates to an average monthly repayment rise of approximately $91. When considering the cumulative effect of the three rate hikes since the start of the year, the total estimated monthly repayment increase for a $600,000 mortgage since February 2026 has reached approximately $272.

The burden is even more pronounced for those who entered the market more recently. With the average new mortgage in the fourth quarter of 2025 standing at $736,000, these borrowers will see an estimated monthly repayment increase of approximately $119 from this latest adjustment alone. These rising costs are contributing to a broader tightening of household budgets, as the cost of servicing debt increases alongside general price rises for essential goods and services.

Changes to Savings Rates and Sector Response

While home loan customers face higher costs, NAB has also adjusted its deposit products. Effective May 15, 2026, the bank increased some personal savings rates by up to 0.35% per annum. The NAB Reward Saver total rate has increased by 0.35% p.a. to 5.00% p.a., while the NAB iSaver introductory rate has been raised by 0.25% p.a. to 5.25% p.a. These changes provide some relief for savers who have sought higher returns on their deposits following the low-rate environment of the previous year.