Statement: NAB responds to ACCC Residential Mortgage Products Price Inquiry Interim Report
NAB today responded to the release of the ACCC’s Interim Report on its Residential Mortgage Products Price Inquiry.
NAB Chief Operating Officer, Antony Cahill, acknowledged the extensive work of the ACCC, on an issue that is of considerable interest to Australians.
“We will review the Report thoroughly and give consideration to the issues raised. We will continue to assist the ACCC in their Inquiry, as they prepare their Final Report.”
Mr Cahill said NAB takes it role in providing Australians with access to finance to buy property and lending responsibly very seriously.
“Competition is strong in the home loan market, and NAB is always seeking to provide the best home lending experience to customers.
“With thousands of home loan products on sale in Australia from more than 100 providers, Australians have never had more choice when it comes to home loans. And, this is at a time when interest rates remain at historical lows.”
Mr Cahill explained NAB is required to balance many factors when setting its home loan rates and lending policies, and that these complex decisions are not made lightly. This includes taking into consideration the needs of customers, regulatory constraints, the competitive landscape, the economic environment, the cost of doing business, the home lending portfolio performance and composition, and the overall performance of NAB as a company.
“Like any business, we continually monitor our competitors, both large and small, to make sure we’re providing competitive home loans. This means decisions about changes to our prices, policies, and products can be made quickly, or, at other times, can be considered over an extended period,” Mr Cahill said.
Mr Cahill said NAB proactively contacts existing home loan customers to discuss their needs and ensure their product is right for them.
Since April last year, NAB has contacted more than 300,000 customers with a NAB Home Loan Check In, which includes a conversation with a home loan specialist.
“The average duration of a NAB home loan is 5 years, which tells us that customers have the flexibility – and they use it – to make changes and adjustments to their home loans,” Mr Cahill said.
Mr Cahill also noted that around 81 per cent of NAB’s home loans are on an interest rate below the current standard variable rate through a range of discounts available on its home loan products, including the NAB Choice Package and highly competitive fixed rate terms.
In determining what discount off the advertised rate NAB can offer a customer, NAB considers the individual circumstances of the applicant – for example, the purpose of the loan (owner occupier or investor), the repayment method (principal and interest or interest only), and the type of loan (premium or basic features); the amount of the loan; the borrower’s ability to repay their mortgage; and the amount of the loan compared to the value of the property (ie. Loan to Value ratio) – and what other lenders may be prepared to offer.
“This is indicative of a competitive market, and we continually review the setting of interest rates, our policies, and products to ensure we provide the most suitable offering for our customers’ needs,” Mr Cahill said.
“I encourage Australians, both NAB and non-NAB customers, to contact us about how we can help.
“We want long-term relationships with our customers so we can support them with their property ownership goals – whether that’s for their first home, their next home, or an investment property,” Mr Cahill said.
- Interest rates are at their lowest in around 50 years.
- In the last 12 months, NAB has re-priced its variable rate home lending portfolio on two occasions – March 2017 (increased all owner occupier and investor home loans by 7bps) and June 2017 (reduced all owner occupier principal and interest loans by 8bps, and increased all interest only loans by 35bps) – and made four sets of changes to its fixed rates. In June 2017, NAB also introduced its lowest ever fixed rate for First Home Buyers – 3.69% p.a. for a fixed 2 year term, for an owner occupier principal and interest loan.
- In the last three years, NAB has made more than 100 home lending policy changes to ensure we continue to lend responsibly.
- Customers who want to request a Home Loan Check In can do so at nab.com.au/checkin, in branch, or call us on 13 22 65.