What this means for interest rates
NAB has been cleared to acquire neobank 86,400, which raises questions about the interest rate 86,400 customers will receive.
The deal is expected to be finalized by the middle of the year, but the two banks are keeping a low profile on whether 86,400 customers will keep their interest rates or receive NAB or UBank interest rates.
According to Canstar, if 86,400 customers received UBank or NAB interest rates, they would end up paying more or less depending on the accounts they hold.
Home loan clients
86,400 mortgage customers with a three-year fixed rate would save $ 35 per month by switching to NAB’s lower interest rate, or $ 80 by switching to UBank’s 1.75% interest rate.
UBank has one of the lowest three-year fixed rates on the market.
This is based on homeowner loans valued at $ 400,000 with a loan-to-value ratio of 80% and a term of 30 years.
Likewise, home loan customers with 86,400 fixed one or five years would save on interest by switching to NAB or UBank rates.
However, 86,400 customers on their 2.34 percent variable rate would pay $ 73 more per month if they received NAB’s 2.69 percent rate, or $ 26,233 more over the term of their loan.
Savings account clients
For 86,400 savings clients, the situation is a little different.
86,400 has a base rate of 0.10 percent and a premium rate of 1.10 percent, which brings it to 1.20 percent provided customers deposit at least $ 1,000 into an account each month.
In the first year, that means that a person with a qualifying $ 10,000 deposit would earn $ 186.88 in interest.
Someone with the same deposit amount would earn $ 171.24 smaller at UBank, or $ 46.56 at NAB.
Interest rates in Australia are currently at record highs after the Reserve Bank of Australia (RBA) cut rates to 0.10% in March 2020 to curb the effects of the COVID-19 slowdown.
The RBA is expected to keep the interest rate on hold at its meeting on Tuesday, April 6, but banks are now starting to move rates.
CommBank recently broke ranks to raise its four-year fixed rate, with Bendigo Bank and Aussie Home Loans also raising their four-year fixed rates.