Cut rates at UBank may not be for you
The Age
Monday March 7, 2011
NATIONAL Australia Bank has upped the ante in the mortgage war by offering a 6.99 per cent standard variable rate home loan through its online-only operation, UBank.The cut-price package is part of a strategy by NAB to ramp up its battle with Commonwealth Bank and Westpac while turning its two-year-old UBank internet business into a full-service bank.But UBank's new home loan deal, pitched at the lowest end of the current price range, has a catch.No fees are involved in setting up and running the loan, but it is only available to home owners who want to refinance or switch from an existing mortgage.As well as excluding first-time buyers and people who have paid off a previous loan, the UBank package also caps the value of its deal at 80 per cent of a customer's current mortgage.The restrictions are likely to limit the attraction of UBank's move even though its headline rate is about 0.8 per cent lower than most of the major banks' main mortgage offerings and 0.25 per cent below CommBank's latest deal to combat NAB's "breakaway" no-fees deal.Lisa Gray, NAB's head of personal banking, acknowledged the limitations, telling BusinessDay that UBank was not designed to be "all things to all people".However, this represented the next step in adding an "attractive" mortgage offering to UBank's transaction and deposit accounts as it gradually moves to becoming a full-service web-based bank."Our focus is on a simple, core suite of products and we're not going to over-complicate matters," Ms Gray said.
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