The Herald Sun has reported that the NAB would pay exit fees for mortgage customers that change their home loans from Westpac and Commonwealth Bank.
This is one of the most dramatic moves ever contemplated by one of the big four banks to entice customers from Westpac and Commonwealth Banks to switch their mortgages over to the NAB.
Commonwealth Bank has stated that they will in turn try to retain their customers.
Westpac and CBA are refusing to abolish exit fees, while the NAB executives on the other hand have granted permission to their staff to reimburse customers from the rival banks with a $700 termination fee.
This new venture of the NAB's could cost the bank tens of millions of dollars if customers decide to switch their mortgages over, but this venture is likely to have long term benefits.
This experiment could cause the major four banks to try to undercut one another thus producing cheap deals and incentives for home buyers.
ANZ and NAB no longer charge mortgage exit fees to customers wishing to change their mortgage to another lender, in the first four years of their loan term. Unfortunately Westpac and CBA are still charging the exit fees forcing their customers to pay higher interest rates.
Lisa Gray head of NAB's retail Banking stated that the NAB had abolished the fees on variable mortgages, because customers were entitled to find a better deal if they were unhappy with their bank.
NAB has had the cheapest standard variable rate since mid 2009.