Many of National Australia Bank's customers have been slapped with bigger monthly payments after one of the nation's major financial institutions incorrectly computed repayments for some variable and tracker-style mortgages.

Around 18,000 British clients of NAB's Clydesdale and Yorkshire subsidiaries have been left with a deficit on their mortgages, and have all been demanded to pay the revised monthly amount and an additional sum to meet the amount of shortage.

A total of £19 million ($A32.8 million) has been underpaid, with an average home owner shortfall amounting to £800 per loan. Some individuals face reparation running to an additional $518 a month to bring their mortgages back on track.

Clydesdale Bank announced there were several options available to clients such as making a one-off restitution to cover the deficit or prolonging their mortgage term.

Both banks were handling matters on a case-by-case basis. Clydesdale has also been in discussions with the British bank regulator over the concern.

With £12.3 billion in mortgage assets or 1 per cent of the total market, NAB is a relatively small player in the UK. Its British arm generated less than 5 per cent of the Australian firm's first-half cash earnings of $2.2 billion.

Data from Deutsche Bank this week cautioned that the UK's banking market faced difficulties, including a tougher suppression by regulators and the sight of increasing interest rates.

It, however, also said the retail banking sector stayed pleasant, with indications of an developing mortgage market.