NAB refunds $1.7 million for overcharging interest on home loans

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National Australia Bank has refunded $1.7 million to 966 home loan customers after incorrectly setting up some mortgage offset accounts over a seven-year period.

NAB started an internal review in February after a number of complaints from customers who were overpaying interest on their home loans.

It found that some offset accounts set up between April 2010 and August 2017 had not been linked correctly to customers’ home loan accounts, which meant money in the offset accounts didn’t reduce the interest payable on the home loan.

NAB’s general manager for home lending, Meg Bonighton, blamed an administrative error and said the affected customers represented 0.73 percent of the total number of offset accounts established through its broker channel since 2010.

Affected clients had received refunds so they were charged only the interest that would have been payable if the account had been set up properly.

Commonwealth Bank’s Bankwest division in February refunded $4.9 million to 10,800 customers for a similar error.

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