86 400 slashes rates as you pay off your home loan

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on August 21, 2020
86 400 slashes rates as you pay off your home loan

Source: Twitter

Neobank 86 400 has launched a new strategy to reward customers for paying down their home loan.

The lender has introduced tiered variable rates for its 'Own Home Loan', dropping borrowers' interest rates as they lower their loan to value ratio (LVR).

The three tiers of variable rates for owner-occupiers making principal and interest (P&I) repayments are:

  • 2.74% p.a. (3.02% p.a. comparison rate) for an LVR less than 80%
  • 2.64% p.a. (2.92% p.a. comparison rate) for an LVR less than 70% 
  • 2.59% p.a. (2.87% p.a. comparison rate) for an LVR less than 60%

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
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Rates correct as of January 22, 2022. View disclaimer.

Investors making P&I repayments can also take advantage of the tiered system, with rates of: 

  • 3.09% p.a. (3.36% p.a. comparison rate) for an LVR less than 80%
  • 2.99% p.a. (3.27% p.a. comparison rate) for an LVR less than 70% 
  • 2.89% p.a. (3.17% p.a. comparison rate) for an LVR less than 60%

The new rates are effective from 20 August 2020 and apply to all variable rate customers, including existing Own Home Loan customers. 

86 400's standard variable rate for owner-occupiers is 4.10% p.a. (4.36% p.a. comparison rate), and all home loans are only available through a mortgage broker. 

Melissa Christy, Lending Product Lead at 86 400, said the neobank was thrilled to reward customers for paying down their loan. 

"We built 86 400 to help Australians take control of their money," Ms Christy said.

"By reducing the variable loan rates for customers with more equity in their property, we are helping our customers do more with their money. With rates at an all-time low, it's a great time to refinance."

86400own01

Source: 86 400

86 400 is also offering a $2,000 cashback reward when you refinance before the end of the month and boasts an approval time of hours, rather than days. 

The neobank celebrated its first anniversary as a bank in July, launching its savings and transaction accounts in September of last year and its all digital mortgage business in November.

Since then, the lender has funded over $40 million in home loans and has its sights set on $2 billion in home loans by the end of 2021. 

It's the second lender to announce a tiered home loan system, with non-bank Athena announcing it's 'Athena Accelerates' offering last week.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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