the adviser logo

NAB clamps down on serviceability

by Charbel Kadib5 minute read

The major bank has introduced new requirements for serviceability assessments in lieu of the current virus-induced crisis, calling on brokers to make more rigorous enquires into a borrower’s financial position.

NAB has informed brokers that it has tightened its serviceability assessment requirements for new home loan applications lodged from 20 April.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

The big four bank has asked brokers to make additional enquiries into a borrower’s financial position in light of the economic fallout from the coronavirus (COVID-19) outbreak.

The bank will now require brokers to complete a COVID-19-specific template as part of the home loan application.


The template would include considerations of a client’s job/income security and any COVID-19 relief assistance they have received or requested, including loan repayment freezes or the JobKeeper wage subsidy.

For JobKeeper subsidies, brokers will need to determine whether a customer is performing their usual duties and receiving their regular salary, receiving a higher salary due to the subsidy, or performing minimal duties or no duties.

Brokers are also being encouraged to ask additional “open-ended” questions to discern the broader impact of COVID-19 on a client’s financial position, including reductions to secondary income, (i.e. rental income, bonuses, and commissions), reduced working hours, or any future changes they’re aware of.

Steve Kane, NAB’s general manager, broker distribution, told The Adviser that the changes are designed to ensure that the bank continues to lend responsibly.

“NAB remains open for business and continues to support its customers through an incredibly challenging environment. In doing so we must continue to meet our responsible lending obligations, which [require] additional questions to be asked of customers,” he said.

“We continue to assess all applications based on a range of measures to ensure our customers are able to appropriately manage their home loan commitments, both today and in the future.”

NAB joins the likes of Bankwest, INGGateway BankMyState Bank, Heritage Bank, ME Bank and a number of non-banks have also imposed restrictions on such borrowers to maintain credit quality amid forecasts of a spike in defaults.

Other stakeholders in the lending industry have also adjusted their risk appetites, with mortgage insurer QBE Australia imposing an “embargo” on the provision of lender’s mortgage insurance to borrowers employed in industries hardest hit by the outbreak. 

Deposit bond provider Deposit Power has also revised its underwriting policy for short-term deposit guarantees, doubling the equity requirement for home equity products from one to two times the deposit amount.  

[Related: Bankwest updates credit policy, process, and valuations]

NAB clamps down on serviceability
nab building ta
TheAdviser logo
nab building ta

Charbel Kadib

Charbel Kadib


Charbel Kadib is the news editor on The Adviser and Mortgage Business.


You need to be a member to post comments. Register for free today


mark lewis fast ta llosc4

In Memoriam: Mark Lewis, 1963–2022

Mark Lewis passed away on Saturday (13 August). Mr Lewis was a well-known identity in the third-party broker...

anthony waldron mortgage choice ta ithtxm

Broker expertise key for securing right loan: Mortgage Choice

The data, which is derived from a June survey of 1,002 broker customers and conducted by Honeycomb Strategy,...

Mark Bouris new ifa

Brokers need to focus on the ‘value-add’: Mark Bouris

With competition among brokers increasing as the number of brokers rises – coupled with the fact that fewer...

Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more