NAB mortgage deferrals plummet too

author-avatar By on November 05, 2020
NAB mortgage deferrals plummet too

Source: Wikimedia Commons

NAB full-year results show its number of mortgages in deferral have fallen by almost 70%.

NAB offered deferrals to a peak of 110,000 home loan customers over the coronavirus period. 

As of June 2020 this number had fallen to 92,000, and as of 23 October, 75,000 loans are no longer in deferral, bringing the number of NAB's deferred mortgages to 34,000, worth $14 billion. 

This is worth less than 5% of NAB's total loan book at the moment, and according to NAB, a further $10 billion worth of loan deferrals are expiring come the end of November. 

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 18, 2021. View disclaimer.

 

NAB is the last of the big four banks to release its full-year results, along with its data on mortgage deferrals, which are a critical point of reference for how Australian households will cope financially post-COVID, especially after government support is wound back

The Australian Banking Association (ABA) released data in mid-October saying repayments had resumed on nearly half of all deferred mortgages

Commonwealth Bank said it should still have around 41,000 out of a maximum 210,000 loans still being deferred (19.5%) come the end of October, while ANZ also revealed around half of its home loan deferrals have come to an end (43,500 out of 95,000). 

Just this week, Westpac's full-year results showed 31% of its deferred customers had to request a further four-month extension. 

Each of these figures from the biggest banks are above the benchmark set by the Reserve Bank, which recently predicted that just 15% of deferred mortgage customers would struggle to resume repayments.

See also: Have a mortgage deferral? Here's how your lender is expected to help when it ends

Most of NAB's remaining deferrals in Victoria 

NAB's deferral data fits the trend seen by other banks where Victorian customers - those hit hardest by the virus and subsequent lockdowns - occupy the highest number of deferral spots. 

According to NAB, Victoria represents 41% of referrals to NAB Assist, 37% of deferral extensions granted and 33% of remaining deferral balances.

Westpac, by comparison, also had Victoria at the highest deferral extension rate at 38%, ahead of the national average of 31%.

Promisingly, 38% of NAB's customers in deferral elected to resume their repayments prior to their deferral expiry, as recommended by the ABA, while 54% advised their intent to resume repayments at the end of the deferral period. 

Only 2% of NAB's customers asked for a deferral extension, while 1% had to convert to interest-only loans,

Deferrals overweight higher LVRs

NAB also followed a market trend where customers with a higher LVR - loan-to-value ratio - were over-represented. 

NAB had 7% of its deferred loans among customers with an LVR of 90% or higher, which is higher than the market average of 5%. 

According to Australian Prudential Regulation Authority (APRA) data, the level of 90% LVR loans continues to be disproportionate with the wider market in terms of deferrals

Commonwealth Bank (CBA) had the highest share of 90%+ LVR loans deferred out of the 20 largest banks at nearly 13.5% as at October 1, up from 12.9% in July.

Those with an LVR of 60 or less accounted for 34% of NAB's deferrals, but this segment makes up 43% of the home loan market. 

NAB11

Source: NAB


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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