February, 23, 2010

The bank has already introduced a risk-based pricing model on its HomeSide mortgages sold through brokers which offers interest rate discounts to "low risk" borrowers.Under the pricing policy, borrowers who stump up a deposit of 30 per cent on the property they are buying get a 0.1 per cent discount on their interest rate.However, borrowers who are only able to put up a deposit of 10 per cent or less incur an extra 0.1 per cent on their interest rate costs.

NAB is the first Australian bank to adopt risk-based pricing on home loans, although all the banks use it for business loans.The pricing model was developed by NAB last year following requests from brokers for a mortgage product that rewarded borrowers considered less likely to default.NAB's head of broker partnerships, Matt Lawler, told BusinessDaily that the bank was looking at applying the new pricing model to its flagship mortgages sold through branches if it proves successful in the broker channel.

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