NAB backflips on home loan payments
National Australia Bank abandoned an assurance to borrowers that it would only increase monthly mortgage repayments on the 12-month “anniversary” of variable rate home loans, after rapid-fire interest rate rises caught the bank off guard.
NAB customer Liam Garrety and his wife took out a variable rate mortgage of more than $1 million with NAB in July last year, as part of a refinancing for a new family home in regional NSW and for an existing investment property.
At the time of the variable rate loan, NAB told customers on its website: “If you have a loan with a variable rate, your repayments vary when the interest rate rises and falls.
NAB customer Liam Garrety is unhappy with his treatment by the bank. Kerrie Brewer
“If rates go up, we will review your required repayments near the anniversary of your loan set up and will give you notice of your new payment amount if it increases.”
Mr Garrety said he understood the NAB information for the variable rate home loan meant repayments would not go up for at least 12 months, and he had received confirmation from a NAB loan officer, even if the Reserve Bank of Australia increased the cash rate.
He and his wife intentionally chose the NAB loan as they were juggling the home purchase and waiting to sell their previous residence, plus owned an investment property, he said.
If the RBA increased the cash rate, Mr Garrety said he understood that any increase in rates would be capitalised onto the principal of the loan and he would repay more in future years.
“It reinforced that during uncertain times, our repayments would not change in the first 12 months,” he said.
“Repayments were a big concern because of what was happening with interest rate rises.”
But as the RBA repeatedly
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