'One or two notches tighter': NAB's decision to hike fixed rates spells doom for borrowers

NAB has broken ranks from the big four Australian banks, becoming the first to hike fixed rates after the Reserve Bank's interest rate decision this month.

The bank today raised its short-term fixed rate for loans by 0.15 percentage points.

Its lowest fixed-rate option is now well above six per cent, sitting at 6.49 per cent for a five-year term – and the surprise move could spell doom for borrowers hoping for some relief.

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NAB's unwelcome move follows the RBA's third consecutive rate hike on May 5.

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

Canstar data insights director Sally Tindall said NAB's decision shows the rate-hiking cycle among Australian lenders has a long tail.

"Fixed rates are often a window into what banks think is coming next," Tindall said.

"NAB's decision to lift its short-term fixed rates suggests it's not ready to rule out further rate rises, even though the RBA will almost certainly hit pause next month."

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

Tindall said borrowers are unlikely to be dealt a lucky hand for some time.

"The reality is, rates are likely to remain high for the foreseeable future and could well get one or two notches tighter," she added.

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

Westpac is leading the four major banks with the lowest fixed rate loan on offer, with a 6.29 per cent rate for a two-year term, according to data from Canstar.

The lowest rate outside of the big lenders still remains a touch below six per cent.

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

At the start of 2026, there were 83 lenders offering at least one fixed rate hike under six per cent.

However, the rate of home loans have not slowed despite the fresh boost of buyer anxiety hitting the property market.

Total residential home loans hit a record high of $2.48 trillion in the month of April.

Figures from the Australian Prudential Regulation Authority (APRA) show housing loans among deposit-taking institutions (ADIs) increased by $14.3 billion last month, an increase of 0.6 per cent on the month prior.