National Australia Bank (NAB) has effectively priced itself out of Mackay, Queensland. The Melbourne-based bank sent an email to mortgage brokers late last week highlighting the postcodes that now require a 30% deposit to qualify for home loans.
Surrounding areas were also affected by NAB’s latest cap on borrowers, including Sarina, Ilbilbie, Koumala, Nebo, Moranbah, and Middlemount.
Graham Bowling, a business manager at Mortgage Choice Victoria Street, was one of the first brokers to receive the updated list, saying it was in total contrast to how NAB has operated in Mackay in the past.
According to Bowling, NAB has strived to maintain good relationships with brokers over the years and has aggressively pursued the Mackay market.
"They were superior [to the other banks] with the deals they offered, having such good rates,” he said. "[APRA] has been looking at the lenders' mortgage books and may have deemed NAB’s market share for the 4740 postcode risky. Therefore, the bank has slowed the new business stream and low deposit lending.Now, by asking for a 30% deposit, [NAB is] effectively saying it doesn't want any more business in Mackay."
In response to increasing risks in the housing market, NAB has compiled a borrowers’ blacklist of more than 600 towns and suburbs where it has capped lending to borrowers. Large swathes of Queensland, Western Australia, the Northern Territory, and South Australia were severely affected by the new lending caps.
"NAB takes into account a range of economic factors, and regularly monitors the performance of local markets to ensure we continue to lend responsibly and sustainably," a bank spokesman said.
"We recognise that no two suburbs are the same, and there are some geographic areas across Australia which have been impacted by local economic conditions. As a responsible lender, we adopt strategies in these geographic areas that seek to reduce the risk to our customers and our business."
Bowling said the other major banks had not implemented similar caps. CBA still offers loans with a 5% deposit. According to a spokesperson, CBA “assesses every home loan application on a case-by-case basis to ensure that [it meets both customers' needs and] responsible lending obligations."
ANZ offers a 10% deposit to existing customers and Westpac works out deposits on a case-by-case basis.
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