Quick Summary
Founded
1981
LMI Provider:
NAB uses Helia and QBE to insure their loans.
Lender type:
Major Bank
Like most other banks, National Australia Bank (NAB) doesn’t have its own Lenders Mortgage Insurance (LMI) provider.
NAB uses QBE for its own home loan applications and NAB Broker applications.
NAB Broker is a broker-dedicated channel which means it’s really designed for lower risk clients such as those with a large deposit. Whereas, the normal NAB arm deals with customers direct.
In the past, both Genworth and QBE were used largely because NAB and NAB Broker (which was originally set up as Homeside) each have their own products and interest rates. Ultimately, NAB and NAB Broker have resorted to the same LMI provider.
There are higher interest rates for loans over 80% of the property value.
How Does NAB’s LMI Compare?
Pros
- They are great with loans over $1 million at 95% of the property value (LVR).
- They have a Delegated Underwriting Authority (DUA) which QBE which allows them to approve loans that other lenders can’t.
- They can consider customers on probation.
Cons
- They rarely capitalise LMI which means your home loan can end up being more expensive.
- If a home loan application fails credit scoring, it’s rare that it will be manually reviewed.
- There can be big differences between the assessment of two credit managers.
- There are higher interest rates for loans over 80% of the property value.
Capitalising LMI Makes A Lot Of Sense
If you’re borrowing at 90% LVR with NAB then your LMI is deducted from your overall loan amount. So you may actually get 88.5% after you’ve paid the mortgage insurance.
However, with other lenders you can add the LMI onto the loan which means you get the full 90%. This is quite a big deal for most property buyers.
Firstly, if you wanted to buy a $500,000 property and applied through NAB then you’d need an extra $7,500 as a deposit!
Secondly, when you think about it, you’re actually paying more in mortgage insurance by not capitalising LMI.
NAB’s LMI looks cheap because their LMI premium rates are lower than most lenders. However, when you consider capitalisation, it’s often better to go elsewhere.
| LVR | $0 – $300,000 | $300,001 – $500,000 | $500,001 – $750,000 | $750,001 – $1,000,000 |
|---|---|---|---|---|
| 91% | 2.00% | 2.60% | 3.48% | 3.55% |
| 92% | 2.00% | 2.60% | 3.62% | 3.69% |
| 93% | 2.25% | 3.94% | 3.76% | 3.83% |
| 94% | 2.25% | 3.94% | 4.12% | 4.20% |
| 95% | 2.48% | 3.24% | 4.36% | 4.44% |
Should You Apply With NAB?
Not sure which home loan is right for you? Our Home Loan Experts can help!
Talk to one of our specialist mortgage brokers by calling us on 1300 889 743 or by completing our free online assessment form.
\
\