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NAB Goes For A Taste Of Rural Lifestyle
National Bank
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The country. It's famous for having friendly people, home-cooked meals, and fresh country air.
If you're considering buying a home in the country, you may have seen niche home loan products, such as the ones offered by National Bank. NAB are offering Rural Lifestyle Home Loans specifically tailored for borrowers wanting to buy a rural property.
Firstly, let's define what NAB mean by ruralÂ. According to NAB, a rural property is one that is further than 50km away from a provincial city (defined as having a population greater than 20,000) or more than 20km away from a primary regional town (which has a population greater than 10,000); the property must be larger than 10 hectares, and it cannot generate more than $20,000 income.
If you're looking to buy a home that fits the above criteria, you may be eligible for a variable or fixed rate Rural Lifestyle home loan, or the Rural Lifestyle FlexiPlus Mortgage which is a line of credit facility.
The variable rate Rural Lifestyle loan offers some features including the ability to redraw, but a minimum withdrawal amount of $2000 applies.
The fixed rate Rural Lifestyle loan allows extra repayments but only up to a maximum threshold of $20,000. Any extra payments made beyond this amount would attract a prepayment fee and other charges.
Rural Lifestyle FlexiPlus offers a line of credit with the ability to make unlimited repayments and access on offset facility, but the annual fee is $250.
All of NAB's Rural Lifestyle Loan options let you borrow up to 70% of the value of the property, or 65% of the value of a property zoned as a Rural Leasehold. This means land that has been granted a lease for specific land use such as pastoral or agricultural purposes, as opposed to land zoned as a Rural Freehold which refers to a deed of grant land.
Compared to standard loans offered by other lenders, NAB's Rural Lifestyle Loan to Valuation Rate (LVR) of 65% or 70% is quite low, so borrowers considering this type of loan would have to accumulate significant savings to cover the remainder of the property's value.
When considering the purchase of a rural property, first do your homework to find out the home loan features you need. Speak with a financial broker to discuss your loan options, shop around to find out the loans available from different lenders and you'll be sure to get the best deal by a country mile.
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