This Commissions Guide article relates to NAB Residential loans. Articles related to other NAB products can be found here:
Connective will maintain this guide to the best of its ability but cannot guarantee that the information within is complete, and/or in line with the latest guidance and policies of the lender. If you believe anything is missing or inaccurate, please contact us.
Contents:
Commission Rates
Commission rates effective for draw downs effective from 1 September 2024
| ex GST | inc GST |
UpFront | 0.65% | 0.715% |
Trail - Years 1 - 2 | 0.15% | 0.165% |
Trail - Year 3+ | 0.2% | 0.22% |
For customers with existing loans applying for subsequent loans post *1 September 2024 the broker will continue to receive the old trail rates
No change to existing loans drawn down prior to *1 September 2024
Commission rates effective for draw downs prior to 1 September 2024
| ex GST | inc GST |
UpFront | 0.65% | 0.715% |
Trail - Years 1 - 2 | 0.15% | 0.165% |
Trail - Year 3 | 0.2% | 0.22% |
Trail - Year 4 | 0.25% | 0.275% |
Trail - Year 5+ | 0.3% | 0.33% |
Trail rates applicable to loans that settled from 1 October 2014
Upfront Commission
National Australia Bank does not pay upfront Commission on all their NAB Residential and Commercial loans. To find out which NAB loans they pay upfront commission on go to their website: www.nabbroker.com.au login and you will find the “NAB Broker Product Schedule” under the Resources tab which lists the NAB products they pay commission on.
Upfront commission for new loans is calculated on the drawn loan balance on the 5th calendar day after the date drawdown and net of any linked offset facility. Net balance includes the drawdown amount, offset balance, prepayments, fees applied interest (not accrued) and transactions.
Upfront commission on construction loans will continue are calculated based on the settled limit.
NAB does not pay any upfront on a bridging loan.
Lines of credit are calculated at 75% of the Approved Limit
The one of $350 variation fee has been removed from 1 Sept 2024
Subsequent drawdowns
If a customer retains funds to be used at a later date, NAB will pay upfront commission on the subsequent drawdown amount (i.e., on loan funds used after the initial drawdown), net of any linked offset facility, provided the subsequent drawdown:
Occurs on or after 6th Calendar Day following the initial drawdown date, and
Occurs within 365 days of the initial drawdown date, and
Is for an amount equal to, or greater than $20,000, up to a maximum loan split limit.
For a loan variation Subsequent Upfront Commission is paid on any variation at the end of the period (365 days) based on the net debit balance (net of offset) provided the increase is by $20,000 or more.
For new residential loans. Paying Subsequent Upfront Commission at the end of the (365 days) based on the net debit balance (net of offset) difference between the initial upfront commission calculation and the end of period (being greater than or equal to $20,000)
For varied residentials (limit increase). The variation of Subsequent Upfront Commission will look at the difference in net debit balance (net of offset) on day 365 from the most recent variation drawdown day 5 net debit balance (being greater than or equal to $20,000).
The maximum commission payable for a subsequent drawdown must not exceed the commission that would have been payable if the loan account was fully drawn as at 5 calendar days after the initial settlement date.
NAB will not pay upfront commission for a subsequent drawdown on construction loans, variations, or if the purpose of the subsequent drawdown is not disclosed in the loan application.
Clawbacks
Claw back rates effective from 1 September 2024 (for drawn downs after 31st of October 2022)
Period | % Clawback |
0-12 Months | 100% |
13 Months | 50% |
14 Months | 46% |
15 Months | 42% |
16 Months | 38% |
17 Months | 34% |
18 Months | 30% |
19 Months | 26% |
20 Months | 22% |
21 Months | 18% |
22 Months | 14% |
23 Months | 10% |
24 Months | 6% |
Claw back Rates prior to 1st September 2024
Period | % Clawback |
0-12 Months | 100% |
13-24 Months | 50% |
Where a loan is fully repaid or discharged within 18 months of the drawdown date, and is replaced by a variation within 1 month, NAB at their discretion may:
Treat the variation as a new loan, clawing back Upfront commission and paying the full Upfront commission on the new loan; or
Disregard the discharge of the loan and pay Upfront commission on the loan increase dependent on the loan product.
If any loan is subject to any payment default or other material default by the borrower within 18 months of the drawdown date and the default is not rectified within time period specified by NAB or they are satisfied on reasonable grounds at any time during the term of a loan that a broker has knowingly been a party to the following conduct:
Any elements of fraud, dishonesty or illegality associated with an application, or
Any elements of an application or the Borrower’s security have been misrepresented, are untrue or are substantially incorrect
Offset/Utilization Rules
If on the date that is 6 months after the draw down date the outstanding principal balance of a term loan is less than or equal to 80% of the principal balance of the loan at the draw down date, the broker must repay a pro rata amount of Upfront commission calculated as follows: R = U-(A x Upfront Commission rate) where R is the Upfront Commission to be repaid, U is the Upfront Commission previously received and A is the outstanding loan balance on the date 6 months after the drawdown date.
Where the net balance of the loan is reduced to zero by way of the clients moving the funds into off set/redraw, a clawback is applicable based on the above clawback rules. If the balance is redrawn on the loan to bring it back into a debit balance, the clawback has already occurred and cannot be reversed.