NAB's online mortgage launch imminent

NATIONAL Australia Bank is set to start selling low-cost home loans through its online business UBank.

NATIONAL Australia Bank is poised to start selling low-cost home loans through its online business UBank as the group fires yet another salvo at rivals.

BusinessDaily believes a launch of UBank mortgages is imminent, with the move likely to compound the pressure on other major lenders to cut their mortgage prices or pursue similar low-cost initiatives.

As the "bank war" launched by NAB at the weekend swung into overdrive yesterday, sources said the group was ironing out final technical "wrinkles" before launching the product.

The launch was likely within weeks -- and could potentially come within days if the bank was certain it had resolved lingering technical issues, according to a source with knowledge of the situation.

Industry insiders expect NAB to further shake up the industry by selling home loans through UBank at a "sharp" -- or exceptionally competitive -- interest rate.

The product is also tipped to be free of fees, including the controversial mortgage exit fees retained by the Commonwealth Bank and Westpac.

ANZ and NAB both abolished the fees on their standard variable mortgages late last year.

UBank, which was launched late in 2008, has consistently been a price leader in the market for savings accounts.

The UBank mortgage launch will come in the wake of NAB's audacious assault on Westpac and CBA at the weekend.

In a bold campaign, NAB is promising to pay the $700 exit fee charged by Westpac and CBA for customers who pay out or move their standard variable mortgages early in their contracts.

NAB yesterday -- coinciding with Valentine's Day -- embarked on a promotional blitz encouraging customers of rival banks to "break up" with their lender.

Westpac has now launched its own sweeping promotional campaign in an attempt to hold its ground in the face of NAB's mortgage onslaught.