National Australia Bank steered its latest home loan product, under the UBank brand, into the market over the weekend with some quirky pricing.
The variable interest rate is 7.05 per cent, and a little higher than the speculation over the last couple of weeks suggested.
On the other hand the comparison rate, which follows a defined formula, is lower at 6.98 per cent. This is an unusual outcome but a function of a discount of 10 basis points on the home loan rate after three years.
There is no application fee and, in line with new NAB policy and planned regulations, also no break fee.
Taking into account the comparison rate the UBank pricing is close to the cheapest in the market. MoZo, a financial comparison site, lists mortgage manager Homestar Finance as having a cheaper loan. IMB also has a cheaper notional rate of 6.82 per cent but the same comparison rate.
UBank continues to offer an interest rate of 6.01 per cent on deposits, and as much as 6.51 per cent for some customers, leaving little spread out of which to pay all the bills and make a profit from UBank home loans.