NAB’s Home Loan Policy On Post-retirement Repayment Plan

Published by Otto Dargan on July 31, 2020
In its commitment towards responsible lending, National Australia Bank (NAB) has revised its credit policies around borrowers who are approaching a retirement age.  From 25 July 2020, NAB will ask its customers about how they will manage their home loan repayments after retirement.  Therefore, customers who are applying for a home loan with NAB will be asked additional questions like: 
  • What is your planned retirement age?
  • How will you manage your repayments once you retire? 
  • Are you applying with an applicant who will retire earlier or later than you? 

Retirement status categories

As per the lending policy update, NAB has identified three categories for retirement status: 
  • Imminently retiring 
  • Non-imminently retiring 
  • Not applicable 
Retirement status Details
Imminently retiring  You are 55 years or older at the time of home loan application OR You plan to retire within the next 10 years. 
Not-imminently retiring  You are under 55 years and do not have plans to retire within the next 10 years. 
Not applicable  You’re already retired or will not be retiring during the life of the loan. 

Why is the age set at 55 years old?

The retirement age for an average Australian is around 62.9 years.  NAB has determined the age of 55 years old as imminent to encourage customers to set a realistic retirement age so they can demonstrate their ability to repay the home loan after retirement.  Your age at the time of application will be used to determine your retirement status. 

What are the acceptable repayment strategies? 

Under each retirement status, NAB has outlined acceptable repayment strategies for those planning to retire soon: 

Imminently retiring

  • You’re applying with a co-applicant who is under 55 years old or does not plan to retire within the next 10 years. 
  • The co-applicant has sufficient income to service the home loan at drawdown. 
  • Your financial assets have a minimum of at least 100% of the home loan limit 
  • You intend to downsize your owner-occupied home at retirement and which has minimum equity of $200,000. 

Non-imminently retiring

  • If you’re applying with a co-applicant, their income can service the home loan. 
  • Selling assets (excluding owner-occupied home and household goods) 
  • Using your savings. 
  • Using income from superannuation 
  • Lump-sum superannuation 
  • You intend to downsize your owner-occupied home at retirement. 

Not applicable

  • Since the policy change is not applicable, retirement-related questions will not be asked. 
If you do not meet the repayment strategies outlined by NAB, our mortgage brokers can help you prepare a solid exit strategy

Are you planning to retire soon? 

Our mortgage brokers can help you with your home loan application if you’re planning to retire soon.  We know the lending policies of over 40 banks and lenders and know which ones are flexible with mature borrowers.  Call us on 1300 889 743 or fill in our free assessment form

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