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 | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.69% p.a. | 6.16% p.a. | $2,319 | Principal & Interest | Fixed | $0 | $530 | 90% | Featured |
| Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | Featured Apply in minutes |
| Disclosure | |||||||||
6.09% p.a. | 6.11% p.a. | $2,421 | Principal & Interest | Variable | $0 | $250 | 60% | Featured |
| Disclosure |
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.
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