Adjustments to discount rates and valuation materiality default

Hi all,

I read a lot about rate creep. Do the banks do this by modify your discounts?

My loan is with the NAB(split) P&I ppor taken out in September 2018 choice package

fixed 5 yr 4.09% - has a .85 product discount,

variable 3.82% - has a .6 product discount and .82 customer discount.

Which discount do they change? Does NAB have the reputation of doing this?

Additional question.
At the end of the fixed term, is it normal and easy to switch the fixed loan to the higher discount loan?

On another note, I read a default on the loan is a material change in price value. What percentage is material, and with the current market corrections how likely will this be triggered?
(I note the market would need to drop a further 15% for me before I lost any equity due to bargain obtained)

 

Where did you read this?

 

My loan contract.

 

Your discounts remain the same because they're stipulated on the contract, but they may increase the non-discounted variable rate and offer a bigger discount to customers taking up a new loan. Hence a customer taking up a new loan effectively obtains a lower interest rate.

I don't know of a particular threshold, but I suspect if you always make your repayments on time, it is unlikely for the bank to take action.