NAB woos home loan applicants with trips, cash and gadget offers

National Australia Bank has come up with new goodies to attract first home buyers to its fold in a competitive lending market at a time when both the RBA and prudential regulator have voiced concern on banks’ exposure to the housing market.

NAB is also offering its “cheapest-ever” two-year fixed rate for first time home buyers.

As part of an overhaul of its products, NAB is scrapping the $1,500 home loan cash back offer and an annual fee waiver of $395 for all broker-originated home loan applications, according to an article in Fairfax Media.

Those will be replaced by a 350,000 NAB Rewards Points offers, with offerings for gadgets such as a smart TVs, cameras and $1,750 towards any flight or hotel purchase with Webjet. Also part of offers are gift cards, cash-backs and other incentives on about 1,500 goods and services, from household goods to vouchers from major retailers such as Coles, Myers and Bunnings.

The scheme is for customers applying for loans till August 31.

The incentives come at a time when the Australian Prudential Regulation Authority has announced a review of mortgage lending practices of banks as it feels banks are too exposed to the housing sector which is a risk. 

Recently, RBA governor Philip Rowe was also critical of banks’ lending standards, saying “too many loans are still made where the borrower has the skinniest of income buffers after interest payments”.

Meanwhile, NAB is just doing what other lenders are. Fighting for more market share through promotions and offers. 

As part of its mortgage range restructuring, the bank recently withdrew NAB Homeplus and NAB Peak Performance products for new customers.

It is attempting to aggressively build market share in the first home buyers' segment with a 3.69 per cent fixed rate for two years for owner occupier, principal and interest loans.

"We recognise these are challenging times for home buyers," a bank spokeswoman was cited as saying by the Australian Financial Review. "We also recognise our customers want more choice on how they are rewarded.”