The new tech will be rolling out throughout the second half of 2024 and is already available for refinancing customers.
It will be extended to new loan and pre-approval applicants over the coming months.
Ubank is NAB's digital-only bank targeting customers under 35 who prefer to do their banking online.
Home loan tracking
The bank recently launched its App Tracker that allows customers to track the status of their home loan applications in real time from submission through to settlement.
The tech provides updates on the application's progress, any required actions, and how the application will proceed.
The technology is also available to mortgage brokers in a bid to help them offer a more efficient and personalised service to their customers.
The bank is now working on its 'Decisioning Engine' tool to speed up the loan approval process to within two days after an application is lodged.
Ubank market growth
In FY24, Ubank increased its home lending book to $13.5 billion with the bank saying it has consistently achieved between two to five times system credit growth.
It's difficult to gauge Ubank's exact numbers as its figures fall under the broader 'Corporate Functions and Other' in NAB reporting.
However, home lending growth in that space has been strong, with NAB attributing the growth to Ubank.
Ubank says its approach to banking is designed to be user-friendly to Millennial and Gen Z customers.
Lending to the young
Recently, the bank's own research found the homeownership dream remained alive among younger Australians, with over half (56%) saying they were looking to buy a home in the next five years.
But 95% of those said they faced barriers, including high property prices (63%), difficulties in saving for a deposit (42%), and high interest rates (39%).
Ubank's chief home lending officer Kanishka Raja said the bank is well aware of the challenges facing young people and has tailored its home loan products accordingly.
Ubank is one of the few to advertise its policy of not charging lenders mortgage insurance (LMI) for home loans with loan-to-value ratios (LVR) of 85% or less - that is borrowers who have a 15% deposit.
Standard lending practice is to levy LMI on borrowers who fail to meet the 20% deposit benchmark.
In practice, this can add thousands, if not tens of thousands, of dollars to the cost of securing a home loan.
Mr Raja told the Savings Tip Jar podcast the Ubank policy is in line with Ubank's core value of helping young Australians get momentum with their finances.
"This is very much directed at those Gen Z and Millennial customers who're looking to get on the property ladder," he said.
"They have good salaries coming in, but they may not have the savings yet to essentially get a full 20% deposit."
Refinancing with built-up equity
Mr Raja said the home loan was a popular product among Ubank's younger customer cohort and many went on to switch to Ubank's lower-rate products when their loan-to-value ratios dropped below 80%.
"We have customers doing these rate reviews with us," Mr Raja said. "But there are many ways in which you can utilise that equity."
"You can bring down the effective rate on your loan, or you can use that built-up equity as cash out to buy another investment but from our perspective, it is about getting young customers on the property ladder."
"Once they're there, as they build wealth through the medium of their house, they are able to use that for other means."
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 Star Customer Ratings |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% | Apply in minutes |
| Promoted | Disclosure | |||||||||
6.09% p.a. | 6.11% p.a. | $3,027 | Principal & Interest | Variable | $0 | $250 | 60% |
| Promoted | Disclosure | ||||||||||
5.69% p.a. | 6.16% p.a. | $2,899 | Principal & Interest | Fixed | $0 | $530 | 90% |
| Promoted | Disclosure |
Image by Bruce Mars on Unsplash
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