NAB increases rates amid credit crisis

National Australia Bank Ltd (NAB) has moved to increase interest rates as Australian households get swept up in the global credit crisis.

NAB has increased its variable home loan rate by 12 basis points to 8.69 per cent amid rising wholesale funding costs from the credit crunch.

The bank said the change equates to about $4.60 per week on the average NAB home loan.

NAB has also increased its HomeSide variable rates by 12 basis points, which will come into effect tomorrow, and its business lending variable rates by 15 basis points.

The hike in business lending variable rates comes into effect from January 7.

NAB said its wholesale funding costs have increased on average by 20 to 30 basis points over the past five months, peaking at 40 basis points in December.

Australia's largest mortgage holder, the Commonwealth Bank, this week also increased its rates when it lifted its fixed-rate home loans by 30 basis points to 8.64 per cent for one to four-year mortgages.

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