NAB win for rent free w/ existing investment debt

Been looking to get one of my own loans away from Pepper and almost gave up after failing servicing with every other major.

Gave NAB a crack and turns out their servicing is red hot for rent-free borrowers with existing investment debt.

$434 monthly servicing improvement compared to exact same calc with CBA. NAB pass by $124 and CBA fails by $310.

The standard notional rent expense across most majors is $650 per month (with living at home letter) whereas NAB is $500 per month but even factoring this in NAB is still $284 better compared to CBA.

A good fit for anyone living at home and buying investment properties.

 

Good news @John_S re your refinance.

I think there may be a little additional layers of complexity with regards to general servicing arrangements here, so the result is likely specific to your individual situation. In general though, NAB is slightly better for the FHB segment (albeit very very marginal).

When existing debts are applied, depending on the terms/rates/repayment type, you're likely going to find CBA produces a slightly better result in some cases too. It will need to be a deal with a high weighted expense on investment debt, lower interest rates and ideally P&I debt elsewhere thats relatively newly written. CBA's effective assessment expense on OFI debt can be lower than the others.

Also ANZ take $375 per month. Macquarie don't have a rental expense if the customer has always lived at home. FirstMac/ResiMac would likely have worked given their lower assessment rate and negative gearing add back.

 

This deal actually failed with Macquarie even using $0 notional rent which was surprising.

Trying to claw my way back to the big 4 and leaving Firstmac/Resimac for later purchases

 

I've found the same thing.

The CBA often works well when you've got loans with other lenders. NAB has a few little quirks in their calculator that gives them and edge.

ANZ and Westpac don't even compare. Second tier lenders have excellent rates and plenty of other benefits, but their servicing is often a let down.

 

Oh right, all my other debt is with CBA so that's why NAB is so much better in this scenario

 

I spoke to BDM only few weeks ago and they do take minimum monthly payments into account even if you living rent free.. You sure?

Cheers,

 

Hey John, what's the reason for moving away from pepper??

Interest rate, customer service ?

Cheers,

 

Ahh, makes sense...

Thanks mate!.

 

Wondering if anyone has insight as to if NAB is still the best lender for this?

Recently moved out of my PPOR and now boarding with parents rent free. PPOR loan is currently with NAB.

Have one other IP with Resimac. Want to refi it back to a major. Will NAB generally give me the edge here?

 

I am not sure off the top of my head but there are a number of lenders that have low notional rents for those living rent free with parents. Best to go through a broker to find out which one is the best fit

 

You may find lenders that the loan may service even with lenders that do apply a notional rent. ANZ applies a lower notional rent than others and there are lenders such as Pepper, HPB and Macquarie (some criteria required) do not apply any notional rent

 

I was under the impression that NAB applied a $500PM notional rent.

ANZ is similar applying $450pm and generally one of the more generous for servicing whe living at home and investing.