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.

Smart Booster Home Loan
Product Features
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
Advertised
Rate (p.a.)
1.99%
Comparison
Rate (p.a.)
2.47%
Product Features
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
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."
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): Credit Union Australia, 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.
Latest Articles
- Confidence in property market soars to all-time high despite booming prices
- Virgin Money launches new digital bank with savings accounts
- Can you get a personal loan for a holiday?
- Women drive fall in unemployment in March
- For the first time, Melbourne is the second most affordable city to rent in
Latest News
Property expert says to avoid 'quirky' renovations
April 14, 2021
What does LVR mean, and how does it affect interest rates?
April 13, 2021
Pros and cons of refinancing your home loan
April 12, 2021
Get free insights & tips monthly
By subscribing you agree to the Savings Privacy Policy