Mortgages: Australia's NAB to reduce domestic home loan fees

NAB Group Executive, Personal Bank, Lisa Gray said: "We know that the variety of fees that can apply to home loans is often a source of frustration for customers – so we’re removing some of them."

The company says that more than half-a million customers will benefit from the changes under which "from early next year, NAB will remove or reduce some of its home loan fees including Prepayment fees, Redraw fees, and Default fees – or more than half of the fees currently charged to customers. This is in addition to already announced changes, including Early Exit Fee effective on 6 December, 2010."

Mrs Gray went on "After these changes, NAB will have the most simple home loan fee structure and the lowest Standard Variable Rate of the major banks. Most importantly, we are not recouping these fees by increasing other fees."

The bank needs a PR boost as it struggles to overcome the fact that a bank is seen as only as good as its last big news: and the last big news, as millions of customers found themselves unable to access funds due to a four-day problem with the core computer system right at salary payment time, was not good. This morning Australian media is reporting that as many as 200,000 customers "remain locked out of their electronic funds."

So reminding customers that the problem was an isolated incident in another wise general pattern of providing customer-focussed services, the bank says "Over the last year, NAB has saved its customers more than $200 million from the changes it had already made to make banking fairer. Last year NAB was the first, and still the only major bank, to have abolished the most unpopular bank fees including the over-limit fee on all NAB credit cards and the overdrawn account fee on all NAB personal transaction and savings accounts."

Lucky, that last one, given that many customers might well have gone overdrawn as a result of their salaries being stuck in electronic limbo on the way to their accounts.

The company has issued the following summary of the planned changes:

Effective from 6 December 2010

• Abolish Repeat Statement, Duplicate Statement and Bank Cheque fees on all NAB and Homeside home loans;
• Abolish Early Exit Fees on NAB Home Loans; and
• Reduce Early Exit Fees on Homeside home loans to no more than $600. Where customers currently have an Early Exit contracted as less than $600, the contracted amount will still apply

Effective from 28 March 2011

• Abolish NAB & Homeside home loan Prepayment fee, Redraw fee and Default fee;
• Abolish 17 Homeside fees including loan modification and fixing fees; and
• Reduce monthly service fees on the NAB 100% Offset and Introductory Rate home loans and NAB Home Equity Line of Credit products to $8.00 per month.