A fixed rate loan allows you to lock in your mortgage and avoid future interest rate hikes.
The National Australia Bank’s Choice Package allows you to fix your interest rate at a competitive low rate. This lets you manage your household budget more carefully, as you know your repayments can’t change while your home loan is fixed in.
It also means that you get to avoid being caught by future interest rate rises. While rates might be falling now, the fluctuations do run in economic cycles. You don’t have to think about those things if you choose a fixed rate now while rates are still competitive.
|Product Name||NAB Choice Package Fixed Rate Home Loan|
|Interest Rate Type||Fixed|
|Comp Rate^ (p.a.)|
|Minimum Loan Amount||$150,000|
|Maximum Loan Amount||$10,000,000|
|Minimum Loan Term||1 year|
|Maximum Loan Term||30 years|
|Maximum Insured LVR||95%|
|Mortgage Offset Account||No|
|Mortgage 100% Offset||No|
|Loan Redraw Facility||Yes|
|Split Loan Facility||Yes|
|Fixed Interest Option||No|
|Suitable for Investment||Yes|
|Available as equity loan/line of credit||No|
|Repayment Type||Principal & Interest|
|Lender's Legal Fee||$0|
|Ongoing Fees||$395 p.a.|
- Receive an additional discount off the advertised fixed rate for choosing the Choice Package.
- Make additional payments up to $20,000 during the fixed term without penalty.
- Access extra funds from the mortgage via the redraw facility.
- A $350 discharge fee applies when you pay off your home loan.
- There's an annual fee of $395.
- If you borrow more than 80% LVR, you may need to pay a lender's mortgage insurance (LMI) premium.
Things to consider about this loan
The NAB Fixed Rate Home Loan is an excellent option for those homeowners who don’t want the uncertainty of interest rate rises and repayment increases for the next few years.
It’s also ideal for investors, as you have the advantage of keeping your interest costs at predictable levels for the next five years. Throughout that time, you may benefit from your rental income increasing, but as your interest costs won’t change you can actually increase the returns on your investment.
The NAB also offers the fixed rate mortgage with an option to pay Interest-Only payments, instead of the full Principal and Interest payments. Again, investors can benefit from this, as only the interest component is tax deductible on their investment mortgages. This also makes reporting the interest costs at tax time much easier to calculate.
This loan type is suitable for buying a property for personal or investment use. It’s acceptable to refinance over to the NAB from another bank on this loan type. The fixed home loan is not suitable for construction purposes.
NAB Choice Package
The NAB Choice Package fixed home loan is jammed with features. You have the option of taking advantage of some or all of them to suit your own individual financial needs. The features include:
- Maximum loan amount: You can borrow as much as 95% of the property value on this loan. This is ideal for those with smaller deposits or investors wanting to maximise investment opportunities. Remember that any NAB mortgages that exceed 95% of the property value will attract a Lender’s Mortgage Insurance fee.
- Choice Package benefits: The Choice Package lets you take advantage of a range of interest rate discounts. The NAB will also waive various banking fees under this package, so you have the opportunity to save plenty of money.
- Additional repayments: During the fixed term, you are allowed to make extra repayments off your home loan up to a maximum of $20,000 over the term without incurring any penalties. These extra payments are on top of the regular minimum payments you’re required to make.
- Redraw facility: Any extra payments you do make off your mortgage can be accessed again if you need those funds.
- Interest-Only option: Instead of making regular Principal and Interest repayments off your home loan, you can set your payments to Interest-Only.
- Payment frequency: It’s fine if you want to set your payments to weekly or fortnightly instead of monthly, if that suits your pay schedule better.
- Low doc option: The NAB welcomes applications from self-employed borrowers who don’t have sufficient financial documentation to verify income.
- Split loan facility: If you don’t want to lock in your entire home loan, you can split your loan. One portion of your loan remains fixed for five years, while the other portion stays on the variable rate. You get the best of both worlds this way.
Choice Package discounts available
Choosing the NAB Choice Package for your fixed rate home loan lets you take advantage of a range of discounts off your interest rates, plus discounts on other banking fees as well. These discounts are offered in exchange for an annual package fee.
|Loan under $99,999||0.5% discount off standard variable|
|Loan between $100,000-$249,999||0.6% discount off standard variable|
|Loan over $250,000||0.7% discount off standard variable|
|Application Fee Waived (usually $600)||Monthly Account Fee Waived (usually $8/month)|
|Gold Credit Card Annual Fee||Waived (usually $149/year)|
Further discounts and benefits for this package include:
- Home Insurance: receive 12 months insurance coverage for the cost of 11;
- Residential Investor Insurance: receive 12 months coverage for the cost of 11;
- Bonus Interest: earn bonus interest of up to 0.25% on top of your existing rate for savings you have in a NAB term deposit account.
Rates and fees
The current rates and fees that apply to the NAB Choice Package 5 year fixed rate mortgage are as follows:
|Rate or Fee Type||Rate or Fee Charged|
|5 Year Fixed Rate Choice Package||4.59% p.a.|
|Annual Package Fee||$395|
Applying for this loan
The NAB have made applying for a five year fixed rate home loan very easy with their secure online application forms. You have two options to choose from:
Pre-approval: The pre-approval (or approval-in-principle) application takes approximately five minutes to complete. A pre-approval is simply an indication of how much you might be able to borrow, which is great if you’re about to go house hunting. Your pre-approval should only take minutes to arrive.
Full application: The full application should take you around 25-30 minutes to complete. The information you enter into the online application form is completely secure, so your personal information does remain confidential. You’ll be asked about your income and your employment status, as well as your assets and liabilities, including any payments you make on other debts.
There are plenty of benefits attached to the NAB Choice Package fixed rate home loan. Whether you’re a personal borrower or an investor, this loan can help you keep your interest charges down and keep your fees to a minimum.
If you like the idea of locking in your rates and your repayments, go ahead and complete the online application form.