NAB may introduce risk-based home loan pricing
National Australia Bank is considering plans to begin pricing residential mortgages according to the risk profile of individual borrowers.
NAB has already brought in risk-based pricing for its HomeSide mortgages which are sold through brokers and offer interest rate discounts to "low risk" borrowers, the Herald Sun reported.
Such loans grant a 0.1 per cent discount on the interest rate when the borrower is able to pay a deposit that amounts to 30 per cent of the property price.
The news may interest Australians who decide to compare home loans. The Herald Sun noted that NAB is the first Australian bank to adopt risk-based pricing on home loans, with the other banks currently only offering it for business loans.
NAB has said it will apply the new pricing model to its flagship mortgages which are sold through its branches if it proves successful in the broker channel.
This week, treasurer Wayne Swan claimed that the government’s investment in triple-A rated mortgage backed securities is boosting competition in the Australian home loan market, the Australian Associated Press reported.
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