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NAB Customers Can Freeze Home Loan Payments for up to Six Months

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NAB Customers Can Freeze Home Loan Payments for up to Six Months
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dust on 20/03/2020 - 13:21 news.nab.com.au (4104 clicks)
Last edited 20/03/2020 - 15:19 by 2 other users

NAB customers can freeze homeloan payments for up to six months

NAB has introduced new support measures for customers. Eligible NAB home loan customers can pause repayments for up to six months. Business customers experiencing financial difficulty can defer for up to six months on a range of floating and variable rate business loans.

NAB has also announced reductions of up to 60bps to fixed rate home loans and a new term deposit rate of 1.75% p.a. We will reduce variable rates on small business loans by 100bps, effective March 30. There are no changes to home loan variable rates.

Home loan rates update

Fixed home loan rates
2.39% p.a. for 1-year
2.29% p.a. for 2- and 3-year
2.79% p.a. for 5-year
Valid for (owner-occupier P&I), effective March 25.

First home buyers will have access to a rate of 2.19% p.a., fixed for two years.

Summary of home loan fixed rate changes here

There are no changes to home loan variable rates

Financial COVID-19 Home Loan Loan

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National Australia Bank Group (NAB)
National Australia Bank Group (NAB)

closed Comments

    • justtoreply on 20/03/2020 - 17:13
      +1

      You got this perfectly right imho. Although in my personal opinion they likely will waive interest in the future for the unemployed (or the government will pay it) as it will be critical to avoiding economic collapse, which is terrible for everyone (banks too). If you shelter (mortgage) and feed someone they will live. Guaranteeing shelter and food is massive.

    • El-Rhi on 20/03/2020 - 17:43

      Securitisation market would dry up, so banks wouldn’t be able to package these loans as freely as they have been doing the last 5 or so years. That’s why RBA is providing cheap funding/liquidity because most banks won’t be able to access funding through securitisation if things get really bad

    • Bob81 on 20/03/2020 - 18:24

      "Do banks just firesell thousands and thousands of houses? My thoughts…Probably not. They'll probably parcel these up in securities, and sell them off those with higher risk appetitties…ring a bell yet?"

      Yes, this is one of the causes of the GFC, it's called 'Collateralized Debt Obligations'.

      https://www.thebalance.com/cdos-collateralized-debt-obligati…

      Also, pausing repayments for six months on your mortgage is not a good idea as the princial and interest would continue to accrue. If you are in financial straits, you should instead enquirer about low/no interest loans.

      https://moneysmart.gov.au/loans/no-or-low-interest-loans

    • mun4 on 20/03/2020 - 21:56

      This mortgage holiday is just part one. Part two is going to be a ban on eviction of tenants for X months. If that happens, it'll make the housing market and the economy crash even faster.

  • Ononono on 20/03/2020 - 14:47
    +1

    People are on their financial death beds and they give us a band-aid. How generous of them

    • Keplaffintech on 22/03/2020 - 11:23

      What do you want them to do, pay off the loan for you?

  • mrshorty on 20/03/2020 - 14:51
    +2

    if defaults rise on properties and leads to property bubble burst, then we'll be in a whole different sht show

  • glennp on 20/03/2020 - 15:00
    -1

    Wow, thanks NAB, alternatively customers could go elsewhere (eg Athena) where interest rate cuts historically have been passed-on in full and pay a competitive variable interest rate. Freezing repayments just means more interest for NAB at an uncompetitive rate, right?

  • niish150887 on 20/03/2020 - 15:02

    Will the interest continued to be charged and would be end up paying higher repayment after 6 months ?

    • activ8newbs on 20/03/2020 - 15:12

      yes to both (in most cases)

  • TSH on 20/03/2020 - 15:18
    +3

    I love how gov is pouring billions into tax breaks for businesses and simply changing the forclosure date from next week to 6months down the line.

    People are spooked so they wont spend, a lot of small businesses are operating day to day, Gov steps in with "stimulus" so that small business death is prolonged and agonising.

    Capitalism and free market in Australia is great. You start a business, enjoy the profits perks and tax breaks, but don't worry… you're also being propped up by the taxes of hardworking people of the commonwealth. Flip flopping between a private company with shareholders to a government backed charity as it suits. General Motors was a prime example.

  • Sheeplovebeer on 20/03/2020 - 15:32
    +3

    Not a deal at all. Interest will accrue and loan term will shorten. All else equal you'll be paying MORE over the life of your loan.

    It sounds like most people have no idea what they are upvoting.

    • justtoreply on 20/03/2020 - 17:16
      +2

      It sounds like you have no idea that 6 months may allow some to get a job and save losing their life's work.

      Is 6 months enough? Maybe not, but it can be reassessed.

      • Sheeplovebeer on 20/03/2020 - 17:20
        +2

        All banks will provide this if you express that you will have difficulty making repayments.

        • justtoreply on 20/03/2020 - 17:22

          This is true. That's not what you expressed in your comment though.

  • igoforthebest on 20/03/2020 - 15:37

    Instead of helping those who already have a property, why cant the banks come up with something that helps those trying to get into the market? Like waive mortgage insurance, reduced gap on LVR and Stamp duty offset etc? Wouldn’t that boost the economy?

    • checkingthisout on 20/03/2020 - 15:49
      +1

      That would fuel over speculation and put those that shouldn't be in the market into a death spiral of debt that they might not be able to pay, because there might not be a job for them in days, weeks or months. It also allows existing investors with several properties to bounce out, off loading their gains and the losses onto the new (younger) owners. Who have over paid.

      Helping first home buyers is not as important as getting older Australians out of over sized 4 bedroom properties built for a family.

    • chumlee on 20/03/2020 - 16:59

      Do you know why they call it The Great Australian Dream?

      Cause you have to be sleeping to believe it

      Any incentive for those getting into the market is just causing more problems later. Save save save is the only sensible requirement for a property

      You reckon these first home owner programs where the government goes guarantor on LMS and you only need 5%, is going to end well?

    • justtoreply on 20/03/2020 - 17:18

      This is the exact way not to spend bank money right now.

  • checkingthisout on 20/03/2020 - 15:45
    +4

    We were already heading for a recession due to this government, it's been 7-8 years now of sustained growth due to population explosions (since labor was in) 27 years since the last recession, can't blame Rudd anymore. This surely proves it, the government has a poor fiscal position, even after taking billions from NDIS to get to a surplus. Back in the black (of night)!

    Never mind the many people i know worried about how they're going to pay their rent from the over speculated housing market brought on by greed and over population.

    Add this to the fact the casualisation of the market brought on by the government, lowers the value of capital in savings, that is a bonus in aiding a government in times where people could draw down on their own reserves, instead these people will have to ask the banks/government for a handout.

    The banks are literally letting the champagne flow down and calling the bubbles left over at the bottom, 'a drink'.

  • ballbog14 on 20/03/2020 - 16:06

    Banks are happy to help people out are they? First I've heard of it. More like they want to get you on a fixed rate with every chance that rates are only going down in this environment.

  • MS Paint on 20/03/2020 - 16:14
    +8

    This deal should be in the forums as a public service announcement.

    This service has always been available.

    This service is not free.

    This service will potentially impact your credit file.

  • Nyclix on 20/03/2020 - 16:31
    +1

    I've been waiting for pre-approval since the 10th of February. Absolute joke.

    • ozizoy on 20/03/2020 - 16:44

      Are you buying a property at this time period?

      • Nyclix on 20/03/2020 - 17:16

        I've been looking at properties for a few months but now I'm unsure with this virus. My job should be secure, but I'm thinking maybe house prices will come down ?

        • justtoreply on 20/03/2020 - 17:21

          I wouldn't touch a house right now unless you're willing to lose what you've saved and declare bankruptcy.

          Truth is its hard to imagine how bad it will get if businesses go under en masse.

          • chriise on 20/03/2020 - 21:54

            @justtoreply: Are you warning against job security or possible negative equity? …or both?!

            • justtoreply on 21/03/2020 - 08:53

              @chriise: I hadn't thought of negative equity but both are possible

  • Trishool on 20/03/2020 - 16:55

    If you take up this offer from any bank, will it have an impact on your credit rating?

    • activ8newbs on 20/03/2020 - 17:06

      no

      • ireadtermsofuse on 20/03/2020 - 17:43
        +1

        Others say otherwise

        • activ8newbs on 20/03/2020 - 18:11

          Source; I used to work in hardship.

          It affects your internal "character" within the bank. But nothing externally. No one else needs to know about it :)

          • El-Rhi on 29/03/2020 - 12:59

            @activ8newbs: You know what comprehensive credit reporting is right? Those banks participating in CCR supply repayment history information each month to credit bureaus. For repayment holidays, it depends how the banks treats this, most will likely report RHI as blank, but either way it shows on your credit file. If RHI is blank during the repayment holiday it won’t impact credit score but every other lender that looks at your credit file for the next 2 year will know you took a payment holiday

        • cozmo on 20/03/2020 - 21:28

          they don't know shyte even if they are talking out of their b hole

  • one-land2 on 20/03/2020 - 17:58

    Question.
    If I have a 3 year fixed home loan at a higher rate, will I be moved to this lower rate ?

    • dust on 20/03/2020 - 18:35
      +3

      You have a fixed rate. What do you think?

    • El-Rhi on 29/03/2020 - 13:01

      No, you have a fixed loan. Fixed means that you agree to pay that interest rate for the fixed term

  • bigbadboogieman on 20/03/2020 - 20:01

    Not a relief more like a lollypop for people who are already worried for their livelihood.

  • scar4ace on 20/03/2020 - 21:30
    +1

    I upvoted this deal then saw the comments about interest

    I really thought NAB was trying to help not screw us further (one can hope). I decided if this were just another PR/media stunt then I would actually leave nab because of this.
    Athena - here I come

  • solidussnake on 21/03/2020 - 08:17
    -1

    More of a psa you are staying paying extra to have this done 🤦‍♂️

  • ShanghaiRocks on 21/03/2020 - 09:34
    +1

    I wonder if CBA and Westpac has announced any COVD19 package and rate cuts..

  • mike001 on 21/03/2020 - 10:02

    The banks ae doing this to protect their interests. Imagine if there was a huge run of loan defaults, a bit like the run on toilet paper. The banks would be in the shit big time.

  • BargainBragster on 21/03/2020 - 11:22

    When comparing NAB home loans interest rates vs other BIG4's, NAB may not sound to be a very exciting deal, however when combined with the LMI offer they fare way better, in my opinion. I am in process of applying for a new home loan & got told by a broker that on top of new advertised rates (post the rate cuts to 2.19%) NAB is also offering 33% reduction in LMI fees, this when compared to other banks LMI charges translates to savings worth 4-9K AUD depending upon your LVR + $2000 rebate on fresh home loans.
    Would like to know your thoughts on this & any personal exp/ feedback on dealing with NAB for home loans?

    • countmein on 21/03/2020 - 12:40

      Personal feedback here so very subjective on my circumstances;
      NAB "refused" my application because of my post code and the aprtmn is high rise building (high dense population they said), required 70% LMI which i was first home buyer asking for 90%.
      So i went to anz n suncorp, both are smooth as, ended up w suncorp because their LMI is almost half compared to ANZ (save 7k). They didnt mention about discount whasoever.
      Later found out that they've been partnering with QBE (lmi provider) so any home loan with them got good price.
      Check with the bank directly or ask agent if they know about this

      • miwahni on 22/03/2020 - 01:16

        High rise in a high density postcode can be an issue. Genworth won't go over 80% for a new property, and will only go up to 90% for existing security. QBE doesn't work off a postcode list but rather works off the number of units in the development - IIRC they max out at 50-something, after which they restrict to 80%. If Suncorp is partnering with QBE, that could be why you got the LMI through in the first place, as I imagine a high rise would have more than 50 units in it.
        Also, always worth checking if the bank you're applying through has their own cover, eg Westpac has internal LMI cover up to 90% as does CBA I believe. I imagine ANZ and NAB would also have their own internal cover. It's usually cheaper than GNW / QBE but also usually harder to qualify for.

        • countmein on 22/03/2020 - 10:13

          Well the last words sum it up for me, it was harder for me to qualify. I got preapproval from both bank n clearly got two diff lmi, which again why should i chosed anz which 7k more expensive

          • miwahni on 23/03/2020 - 00:38

            @countmein: Yeah that's a big difference, I'd have made the same choice.

  • coolsteps on 30/03/2020 - 13:19
    +1

    i would be wary taking up any of these offers. ask the bank first will it affect my credit history as an entry will be made on my file? will interest be capitalised and added to loan after the deferral period anyway? i wonder if its better option if you chose to change loan to interest only for 6 months will they still make an entry on your credit file>?

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