flagFounded: 1834

businessOwned by: ASX Listed

monetization_onFunded by: Retail deposits and wholesale capital markets

securityLMI Provider: QBE LMI for NAB, Genworth for NAB Broker

account_balanceLender type: Major Bank

NAB is a popular choice for many home buyers and investors with an award-winning range of home and investment loans.

Occasionally, they’ve got some great interest rates, especially negotiated rates for home loans over $1 million. They also have some policy niches which allow some people who can’t qualify with other major banks, get approved.

How do NAB’s home loans compare?

They’re great at

But they’ve got some drawbacks…

  • Their customers with loans over 3 years old are often on much higher interest rates!
  • They’re actually two lenders: NAB Broker and NAB. Mortgage brokers can access both but the branch staff can’t!
  • They have many restrictions with their family guarantee (guarantor) loan product and there are much better no deposit home loans available from other lenders!
  • Their credit scoring is tough and you may get declined for no apparent reason
  • Interest rates and fees are not always competitive if you have a small deposit
  • They don’t capitalise LMI premiums so you need a larger deposit
  • Getting approved usually depends on the experience of the credit manager handling your loan
  • They have restrictions on their maximum loan size, which penalises professional investors
  • They’re unlikely to help people with a bad credit history
  • They tend to make a lot of errors when dealing with construction loans
  • As they’re a major bank, you may feel like just a number

NAB Broker or NAB?

NAB Broker used to be called Homeside and is only accessible via mortgage brokers. It’s now been rebranded but it uses a different mortgage insurer, has different loan products and even has different lending policy!

NAB is available through both mortgage brokers and NAB branch lenders. It uses QBE instead of Genworth as its mortgage insurer and has totally different products and interest rates.

Each has their own strengths and weaknesses. You’d go to NAB for an owner builder loan but you’d go to NAB Broker if you’re looking for a low rate for someone with a larger deposit or a lot of equity.

As crazy as it sounds, sometimes our mortgage brokers get a loan approved through NAB Broker that a branch lender couldn’t get approved. Or we get a special interest rate that the branch couldn’t access. It may not make much sense as they use the same brand, but remember NAB Broker is actually a different lender .

Not sure if you should use NAB or NAB Broker? Call us on 1300 889 743 or complete our free assessment form online and we’ll compare both options for you.

What’s the Loan To Income (LTI) Ratio?

NAB have a policy that your new home loan cannot exceed 7 times your total annual income. This includes PAYG, self employed, rental and other income types.

On the face of it, this seems to make sense and, of course, for a home buyer it works well. However, investors with significant negative gearing benefits are limited by this policy.

For example, if you earn $100,000, your mortgage cannot exceed $700,000.

For a home loan, you could typically only afford $600,000 or so anyway but investors could easily afford over $1,000,000. The problem is, they would be unable to get approved because of their income.

As a result, we find that, generally speaking, you shouldn’t apply with NAB if you have several investment properties.

NAB may not approve as much as you can afford, which limits the growth of your property portfolio.

What home loans types do they have?

NAB’s Choice Package is their most popular home loan for people borrowing more than $250,000. You’ll pay an annual fee in return for a lower interest rate for the life of the loan. You’ll also get discounts on a range of banking products such as your offset account and credit card.

NAB’s Base Variable Rate Home Loan is a good choice for loans under $250,000, however, we think that other basic home loans from other lenders tend to be cheaper.

With Fixed Rate Home Loans, NAB tends to have occasional specials that puts them as the market leader. When they don’t have a special, it’s best to apply with another lender.

They also have FlexiPlus Mortgage and Portfolio Facility but they are far less popular.

How do I negotiate a lower interest rate with NAB?

If you’re applying for a home loan ask your mortgage broker to put in a pricing request with their relationship manager. NAB tends to offer good negotiated pricing for loans over $1 million and people who have a large amount of equity.

If you’ve got an existing loan you may find that NAB is quite tough to get a discount from. Like other major banks, their goal is to give you a credit card and cheque account with your home loans so that it’s a lot of work to switch banks. If your home loan is over 3 years old then you’re almost certainly paying too much!

A good mortgage broker will negotiate with the bank for you and if NAB won’t offer you a better deal then they can help you to refinance to a lower interest rate.

Tip for applying with NAB

Use NAB’s home loan application form to prepare for your mortgage application.

Note: This is the latest home loan application effective October 2017. Please refer to NAB Bank for their most up-to-date document requirements.

NAB Family Guarantee Loan

NAB’s Family Guarantee loan allows your parents to use the equity in their property as additional security for your mortgage.

Unfortunately, their restrictive lending policy just doesn’t compare to what is offered by other banks and removes a lot of the benefits of a guarantor loan:

  • You can borrow 95% of the property value as opposed to 105% from other lenders which means you still need a deposit, albeit only 5% of the property value.
  • Your parents can only use an investment property as security whereas other lenders will allow them to use their home as well.
  • Only first home buyers are acceptable whereas other lenders consider investors or second home buyers.

In other words, guarantor loans isn’t something NAB is looking to target.

If you’re a customer that wants to buy a home with no deposit then it’s best to talk to one of our mortgage brokers.

NAB client story: Victor, Vic



Multiple dwellings on one title, first home buyers.


Renting and with a newborn at home, Victor and his wife needed a bigger place and wanted to get out of the rental rate race.

Victor was earning a great income in the IT industry and the couple had saved up a large deposit so they were looking to splash out on their first home.

They found just what they were after in a luxury property on a large acreage that was being advertised for $2.3 million.

The problem was that when they went to apply for a home loan, their lender wouldn’t accept it as the land actually had two properties on it, making it a dual occupancy property. This was despite having a 16% deposit to put towards the purchase!

Most lenders are very conservative when it comes to first home buyers wanting to buy multiple dwellings on one title so their application was declined purely because it wouldn’t be accepted by their bank’s Lenders Mortgage Insurance (LMI) provider.


After speaking with a mortgage broker, Victor was able to get his home loan approved with NAB, the only bank that has a Delegated Underwriting Authority (DUA) for loans over above $1.5 million. The total loan amount was $1,848,000.00.

They were able to sign off on the property on behalf of their LMI provider Genworth.

When assessing their income, NAB was also able to include up to 80% of their rental income from a couple of investment properties they owned.

Of course, since Victor was borrowing over 80% of the property value (LVR), the couple would be charged a large LMI premium.

Luckily, his father-in-law gave the couple a gift when their child was born so they were able to use part of that gift towards their deposit and borrow at 80% LVR, avoiding LMI altogether!

Compare NAB to other lenders

Not sure which lender is right for you? Our Home Loan Experts can help!

Talk to one of our mortgage brokers by calling us on 1300 889 743 or complete our free assessment form.

  • knight

    Why are the banks usually more conservative when assessing inner city apartments?

  • It’s because there have been periods when the CBDs of several Australian cities were flooded with cheap units. As a result of new developments being constructed, inner city apartments tend to fluctuate in price more often than other types of properties as supply and demand change. These price fluctuations are mainly why banks see financing high density units as a higher risk.

  • Bel Ord

    Despite the interest rates not changing, the “People” who sit on the Board for NAB increased owner occupied variable housing loan rates. I can’t understand how NAB Board members can justify the depth of such unethical and immoral business decisions. Severely disappointed :(

  • Hi Bel,
    There has been a genuine increase in the cost of funds for the banks recently. This has been a result of new government legislation that requires the banks to hold more capital for every mortgage they approve. This is why all lenders have made similar changes or are about to make similar changes.
    Some people are choosing to fix their rate so that they are protected from future increases.

  • Bel Ord

    I have in excess of 50% equity. Westpac have not made any noises about rate increase.

  • Hi Bel,
    If you’d like to refinance there are some great options out there. You can contact us here https://www.homeloanexperts.com.au/free-quote/