National Australia Bank has followed its peers by raising its variable rates for interest-only mortgages in a bid to slow down riskier lending.
NAB will lift interest-only rates for both owner-occupiers and investors by 0.35 percentage points from June 30 as it looks to keep interest-only lending below less than 30 per cent of new residential mortgages, as demanded by the Australian Prudential Regulation Authority.
It also dropped principal and interest variable rates for owner-occupiers by 0.08 percentage points, changing its rates mix following similar moves by ANZ and Westpac over the past two weeks.
NAB said the moves were not a response to the federal government's bank levy.
"We need to comply with our regulatory requirements, including APRA's 30 per cent limit on new interest-only lending for residential mortgages, while balancing the needs of customers across our entire portfolio," NAB chief operating officer Antony Cahill said.
NAB's owner-occupier interest-only variable rate will rise to 5.77 per cent, with investors paying 6.25 per cent.
Its standard variable rate for owner occupiers repaying principal and interest mortgages will fall to 5.24 per cent.
Its investor principal and interest rate remains unchanged at 5.80 per cent.
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