Neobank only lender to cut home loan rates in a quiet week

author-avatar By
on October 16, 2020
Neobank only lender to cut home loan rates in a quiet week

Source: 86 400 Twitter

86 400 was the only lender in Savings.com.au's market research to cut home loan interest rates this week as speculation of an RBA rate cut grew.

The neobank cut a variety of fixed and variable home loans for investors, across both interest-only (IO), and principal & interest (P&I) repayment methods.

Interest rates were cut by between 5 and 25 basis points, but 86 400's lending product lead Melissa Christy says this isn't necessarily in anticipation of a potential Reserve Bank cut next month.

"We’ll continue to review our rates based on a range of factors," she said.

Buying an investment property or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for investors.

Lender

Variable
More details
GREAT INTEREST RATE
  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
GREAT INTEREST RATE

Smart Booster Investor Bundle (Principal and Interest)

  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
Variable
More details
GET APPROVED FASTER WITH A DIGITAL APPLICATION
  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
GET APPROVED FASTER WITH A DIGITAL APPLICATION

Neat Variable Investment Loan (Principal and Interest) (LVR < 60%)

  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
Variable
More details
100% FULL OFFSET ACCOUNT
  • Free redraw facility
  • Split account option
  • Unlimited extra repayments
100% FULL OFFSET ACCOUNT

Ocean Investment (Amounts < $1m, LVR < 60%)

  • Free redraw facility
  • Split account option
  • Unlimited extra repayments

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%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of July 3, 2022. View disclaimer.

Some of 86 400's home loans to get a cut were:

  • Investment Own Fixed P&I 1 Year: 20 basis point cut to 2.49% p.a. (2.95% p.a. comparison rate*)
  • Investment Own Fixed IO 1 Year: 20 basis point cut to 2.69% p.a. (2.96% p.a. comparison rate*)
  • Investment Own Variable P&I 60%: 20 basis point cut to  2.69% p.a. (2.97% p.a. comparison rate*)
  • Investment Own Variable IO 70-80%: 25 basis point cut to 3.19% p.a. (3.25% p.a. comparison rate*)

Ms Christy said for an investor facing deferred rent and a tougher rental market, switching to interest-only could be preferable to deferring their mortgage entirely.

"That would enable customers to still meet the interest component of their loan each month, and avoid interest being capitalised as this increases the overall amount owed over the term of the loan," she said.

Deferring a mortgage could leave a borrower thousands of dollars worse off in the long term due to interest capitalisation. 

86 400's cuts come mere days after the neobank also cut its savings account interest rate again.

It's now down to 1.35% p.a., representing a 25 basis point cut.

In an email to customers, 86 400 cited the "economic environment" as its reason for the savings account cut.

Below are now some of the highest interest rates on savings accounts in the market, across both introductory and ongoing accounts.

Lender

4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Special intro rate
  • No ongoing fees
  • No minimum balance

Online Saver (Amounts < $499999)

  • Special intro rate
  • No ongoing fees
  • No minimum balance
001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details
  • Take money out at any time without affecting your bonus rate.
  • Open up to 10 Save accounts and get bonus interest on all of them, including shared Save accounts.
  • Get bonus interest on a combined balance of up to $250K across all your Save accounts.

Save Account (< $100,000)

  • Take money out at any time without affecting your bonus rate.
  • Open up to 10 Save accounts and get bonus interest on all of them, including shared Save accounts.
  • Get bonus interest on a combined balance of up to $250K across all your Save accounts.
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

High Interest Savings Account (< $250k)

    4001$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

    Online Saver ($1-$100k)

      0500$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

      Reward Saver

        000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

        BU Savings Account

          Rates based on a savings balance of $10,000. Sorted by total interest rates. Refer to providers' websites for bonus rate conditions and for any applicable fees and charges. Rates correct as of July 3, 2022. View disclaimer.


          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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          author-avatar
          Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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