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.

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.

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