86 400 slashes rates as you pay off your home loan

author-avatar By 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
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

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

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

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

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 18, 2021. 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 which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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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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