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NAB checking repayment ability of mortgage relief customers for COVID-19

NAB checking repayment ability of mortgage relief customers for COVID-19

If you’re one of the 80,000 NAB customers who deferred their mortgage repayments due to financial strain from the COVID-19 crisis, you can expect a call from your bank shortly.

From this week, NAB has announced it will be calling its mortgage customers who took advantage of its relief package to see if they can begin making repayments.

NAB offered home loan customers the ability to pause repayments for up to six months due to the COVID-19 crisis. Initially, NAB noted it would check in with borrowers at the three-month mark, much like the other big four banks. This announcement means NAB is taking the first steps in reaching out to financially impacted households one month earlier than expected.

NAB Chief Customer Experience Officer, Rachel Slade, said: “The deferral has provided some immediate and much-needed relief, but if customers are able to make payments again, we will be encouraging them to do so.”

“We don’t want our customers to be in debt any longer than they need. We want our customers to choose what’s best for them,” said Ms Slade.

Whether you’re financially able to resume your mortgage repayments or not, this announcement is potentially a good opportunity for you to secure a rate cut. You may just need to be brave enough to ask for one.

Big four bank relief packages

The Australian recently reported that the big four banks have earmarked “billions of dollars for COVID-19-related bad debts”. NAB has allocated $807 million, the lowest of the big four, while ANZ has put away $1 billion. Commonwealth Bank and Westpac have each set aside $1.5 billion and $1.62 billion respectively.

For more information on home loan relief packages, and to see what your bank may be offering, visit RateCity’s relief page.

BankHome loan reliefCredit card reliefPersonal loan relief
NABRepayment pauses of up to 6 months.

Remove late fees for at least three months, starting 3 April 2020.

Reduce the minimum repayment amount to 0.5% of balance or $5 whichever is higher. From 27 April 2020 until at least 24 July 2020.

Reduce the interest rate on personal NAB Low Rate Classic Cards to 12.99%.

Reduced repayments to as low as $100 a month for 6 months.
CBAAutomatically reducing the direct debit repayments for all eligible accounts to the minimum required from Friday 1 May 2020.

Repayment pauses for up to 6 months including a one-off payment to offset any “interest on interest” charges during that time.

Consider requests to switch to interest-only repayments.

Refunding late fees and interest in March 2002.

Repayment pauses for up to 2 months.

ANZRepayment pauses for up to 6 months.

Consider requests to switch to interest-only repayments, increase loan, refinance or apply for an equity loan.

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WestpacRepayment pauses for up to 6 months.

Request fees be waived or deferred when restructuring or consolidating home loans.

Request an emergency credit limit increase on credit cards.

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Source: RateCity.com.au

Turn your call into a rate cut

While pausing mortgage repayments can allow for much-needed breathing room in a crisis, it does have its own negative impacts. In the long run, it may cost you more money due to interest capitalisation.

After you resume your repayments, you may need to make higher repayments to make up for the increase in interest. You may even extend your loan term for up to six months to accommodate for these missed repayments, which ultimately would cost you more in interest.

One way to try and mitigate these costs is to turn your call with your lender into an opportunity to get a rate reduction.

Even if you’re not with NAB, if you’re a home loan customer who has paused mortgage repayments and are now able to make repayments again, consider asking for a rate cut when you get the check-in call.

Steps to asking for a home loan rate cut:

  • Check what home loan rates your bank is offering new customers. Chances are these rates will be lower than what you’re currently paying.
  • Hop on RateCity’s low rate comparison tables to see what more competitive options are available.
  • When you receive a call from your lender, mention that newer customers are being offered lower rates and you want to be moved to one of these rates.
  • If they won’t budge, mention the lower rates offered by competitors and say you’d consider leaving if your rate is not reduced.
  • Ask for a mortgage discharge form to show you mean business. This is a great way to call your bank’s bluff if they still refuse to reduce your rate.

Company
Product

Live-in Variable

Real Time Rating™

4.35

/ 5
Interest Rate

3.09

% p.a

Variable

Comparison Rate*

3.10

% p.a

Repayment

$1,437

monthly

Real Time Rating™

4.35

/ 5
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Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.
Company
Product

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Real Time Rating™

4.24

/ 5
Interest Rate

4.59

% p.a

Fixed - 1 year

Comparison Rate*

3.28

% p.a

Repayment

$1,683

monthly

Real Time Rating™

4.24

/ 5
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Company
Product

Neat Home Loan

Real Time Rating™

4.26

/ 5
Interest Rate

3.64

% p.a

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Comparison Rate*

3.66

% p.a

Repayment

$1,524

monthly

Real Time Rating™

4.26

/ 5
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Product

Investment Neat Home Loan

Real Time Rating™

4.15

/ 5
Interest Rate

3.89

% p.a

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Comparison Rate*

3.91

% p.a

Repayment

$1,565

monthly

Real Time Rating™

4.15

/ 5
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This article was reviewed by Finance Writer Alison Cheung before it was published as part of RateCity's Fact Check process.

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