Borrow
Last of the big four cuts rates to undercut peers
NAB has updated its mortgage serviceability assessment policy, becoming the final big four bank to amend its policy in response to APRA’s new guidance.
Last of the big four cuts rates to undercut peers
NAB has updated its mortgage serviceability assessment policy, becoming the final big four bank to amend its policy in response to APRA’s new guidance.
National Australia Bank (NAB) has lowered its interest rate floor to 5.5 per cent and increased its interest rate buffer to 2.5 per cent, effective for all new home loan applications from 5 August.
The bank’s announcement has seen it undercut its major competitors, CBA and Westpac, which only dropped their rates to 5.75 per cent.
The new NAB rate floor aligns with ANZ’s announcement that it was lowering its rate floor to 5.5 per cent.
As it stands, Macquarie has the lowest floor rate (5.3 per cent), with MyState on the opposite side of the spectrum, dropping its floor rate to just 6.2 per cent.
The revisions have been in response to the Australian Prudential Regulation Authority’s (APRA) changes to home lending guidance, in which the authority scrapped the 7 per cent interest rate floor for mortgage assessments and increased the buffer rate to 2.5 per cent.
Commenting on the changes, NAB’s chief customer officer for consumer banking, Mike Baird, told Nest Egg’s sister publication, The Adviser, that “NAB welcomes the updated APRA guidelines on home lending serviceability”.
“We believe now is the right time to change the approach to how the affordability rate floor is determined, given the continuing low interest rate environment,” he said.
Mr Baird added, “As a responsible lender, serviceability is assessed using a number of factors and we consider all lending applications on a case-by-case basis.”
NAB is the latest lender to amend its serviceability policy, joining the likes of ANZ, Westpac, the Commonwealth Bank, Macquarie, Suncorp, MyState Bank, Bendigo and Adelaide Bank, the Bank of Sydney, and Auswide Bank.
This email address is being protected from spambots. You need JavaScript enabled to view it.
About the author
About the author
Banking
Big banks push for BNPL regulations
The success of consumer take-up and the ease of credit provided by the buy now, pay later sector have seen the major banks renew calls for tighter restrictions on their products, an inquiry heard. ...Read more
Banking
Citi to exit consumer banking in Australia
US investment bank Citigroup has announced that it is pursuing an exit from the Australian market after 36 years. ...Read more
Banking
Westpac faces civil proceedings
The corporate regulator has commenced civil penalty proceedings against Westpac alleging the big four bank used misleading and unfair sales of consumer credit insurance. ...Read more
Banking
CBA to pay $7m penalty for overcharged interest
The Commonwealth Bank of Australia has been ordered to pay a $7 million penalty for charging an interest rate on business overdraft accounts that was substantially higher than what customers were advi...Read more
Banking
CBA taken to court over banking fees
ASIC has commenced civil penalty proceedings against the Commonwealth Bank of Australia, alleging that it charged clients millions in monthly fees when it was not entitled to do so. ...Read more
Banking
Big 4 bank offers $10m in grants to flood-affected customers
A big four bank has launched a $10 million Flood Support Fund to provide grants to customers and businesses in flood-affected areas. ...Read more
Banking
Guide to NSW flood financial aid: From the banks to insurers
The banks are offering customers affected by the NSW floods loan repayment deferrals, among other forms of financial aid, while the Insurance Council of Australia has declared a catastrophe for much o...Read more
Banking
APRA drops big 4 money laundering case
APRA has followed ASIC in closing its investigation into Westpac over the AUSTRAC scandal, which led to the largest corporate fine in Australian history. ...Read more
Is the market overheating; should ETFs take your fancy, and what’s happening to the low and middle income tax offset?
Listen now
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now
Banking
Big banks push for BNPL regulations
The success of consumer take-up and the ease of credit provided by the buy now, pay later sector have seen the major banks renew calls for tighter restrictions on their products, an inquiry heard. ...Read more
Banking
Citi to exit consumer banking in Australia
US investment bank Citigroup has announced that it is pursuing an exit from the Australian market after 36 years. ...Read more
Banking
Westpac faces civil proceedings
The corporate regulator has commenced civil penalty proceedings against Westpac alleging the big four bank used misleading and unfair sales of consumer credit insurance. ...Read more
Banking
CBA to pay $7m penalty for overcharged interest
The Commonwealth Bank of Australia has been ordered to pay a $7 million penalty for charging an interest rate on business overdraft accounts that was substantially higher than what customers were advi...Read more
Banking
CBA taken to court over banking fees
ASIC has commenced civil penalty proceedings against the Commonwealth Bank of Australia, alleging that it charged clients millions in monthly fees when it was not entitled to do so. ...Read more
Banking
Big 4 bank offers $10m in grants to flood-affected customers
A big four bank has launched a $10 million Flood Support Fund to provide grants to customers and businesses in flood-affected areas. ...Read more
Banking
Guide to NSW flood financial aid: From the banks to insurers
The banks are offering customers affected by the NSW floods loan repayment deferrals, among other forms of financial aid, while the Insurance Council of Australia has declared a catastrophe for much o...Read more
Banking
APRA drops big 4 money laundering case
APRA has followed ASIC in closing its investigation into Westpac over the AUSTRAC scandal, which led to the largest corporate fine in Australian history. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
