Money Stuff

“Sorry Commbank, ANZ, Westpac, but it’s over between us.” That’s the banner headline on NAB’s website . It’s their latest marketing campaign to win your business and it’s quite well done … although given the rumblings of collusion and price fixing between the “Big 4” that arise now and then, an advertising campaign stating that they’re not going to be hopping into bed together anymore seems to sort of confirm people’s suspicions that they previously were.

Still, I guess that’s nitpicking.

NAB is offering to pay up to $700 worth of switching fees for customers who switch their CBA and Westpac mortgages over to them. (They can’t offer to pay the exit fees of ANZ customers, because ANZ doesn’t have exit fees). They’re also waiving the $600 establishment fee for refinancing from their rivals.

CBA and Westpac have hit back, saying that they never really loved NAB anyway and that there are much younger, better-looking banks on the market. CBA is offering up to $1,400 of incentives to NAB customers who switch and Westpac is offering potentially thousands of dollars in waived fees to business borrowers. 

What to make of it all? Well, personally I doubt that they’ve flushed the wedding rings down the toilet. Maybe they won’t be facing off across the breakfast table every morning this year, but they could surely fall into a pattern of being friends with benefits instead. What would you call that in financial terms? “Buck Buddies” maybe. 


Maybe I’m being cynical though. What’s your take on the campaign?


Focussing on the mortgage side of it, in my view, it’s a brave marketing campaign that has sparked a bit of a price war. And if it reminds consumers that they haven’t reviewed their mortgage for a while then it will be a great thing. Because you can potentially save tens of thousands of dollars in interest costs by renegotiating your mortgage.

But – before you switch from CBA to NAB, or vice versa, stop and consider A/ What sort of mortgage you need and B/ Whether you might actually get a better deal somewhere else entirely. Or with your current provider. 

I mean, unless you actually have an exit fee with your current product, then NAB’s offer to waive it isn’t much use to you. And if you apply enough pressure, you can sometimes get the application fee waived anyway. The interest rate is what you should really be focussing on when it comes to your home loan, because the lower the ongoing rate, the less your mortgage will cost you.

An example:

A $350,000 mortgage over 25 years.


• At a rate of 8% that mortgage will cost you a total of $810,407.


• At a rate of 7.75% that mortgage will cost you a total of $793,095. A saving of over $17,000. Even better, if you keep your repayments at the original 8% level, then you’ll cut 18 months off your loan and save a cool $50,000 in interest costs.


• At a rate of 7.50% that mortgage will cost you a total of $775,940. A saving of almost $35,000. Or if you keep your repayments at the original level, then you’ll cut 9 years off your loan and save a total of over $90,000 in interest costs.


• and at a rate of, say, 7%, keeping your repayments the same, you could save over $155,000.


That’s a helluva lot better than getting a $600 application fee waived!

(If you want to do those calculations for your specific mortgage, try these calculators.  )

Have your strategy in place though!

Before you phone your bank and ask for a rate reduction, do a bit of research to see what else is out there. There are a few good online sites:  try Ratecity, or Choice’s Better Banking website. In fact a great way to assess how much (or not) you could be saving is to plug your details into Mozo’s Home Loan Health Check calculator.

Once you know what else is available in the market, you can pick up the phone and call your bank. Suggest that they could be offering you a better deal and hint that you’ll be taking your business elsewhere if they don’t play ball.  Sound like you really mean it.  Half an hour of preparation and ten minutes on the phone and you might just be rewarded with a reduction in your interest rate.

Give it a try, anyway. It saves the hassle of switching.

So readers: have you ever tried negotiating with your bank? How did it go and how much did you save?