Athena announced it is slashing variable rates for all new and existing customers, which is noteworthy because many lenders' rate cuts only apply to new loans - existing customers usually have to ask for a better deal.
Athena’s Principal & Interest (P&I) Owner Occupied Loans for <60% LVR now sits at a rate of 1.89% p.a, while the rate for P&I Investor Loans <60% LVR is now 2.19% p.a.
The comparison rates are the same as the advertised rates.
This rate cut marks the ninth time Athena has dropped its variable rate in three years.
Over the month to mid-December last year, 52 lenders hiked their two-year fixed rate products and 64 hiked their fixed rate products for three-year loans.
In the span of 12 months, the major banks increased their four-year fixed rates by between 126 and 135 basis points.
Athena CEO and Co-Founder Nathan Walsh said there is a lot of speculation that the cash rate will go up later this year.
"We have the opportunity to allow our customers to save more and get ahead on their loan before that happens," Mr Walsh said.
"That’s what our voluntary rate drop is all about."
According to Athena, these rate cuts could save the 'typical' homeowner $54,318 over the life of the loan, or $181 a month based on the average advertised rate of 2.70% on a $450,000 mortgage.
RBA data suggests the average owner occupier variable advertised rate is 2.30% p.a.
Athena’s rate cuts across its home loan portfolio include:
- Celebrate Owner Occupier P&I <60% LVR: 10 basis point decrease to 1.89% p.a. (1.89% comparison rate*)
- Evaporate Owner Occupier P&I 60-70% LVR: 15 basis point decrease to 1.94% p.a. (1.91% comparison rate*)
- Liberate Owner Occupier P&I 70-80% LVR: 20 basis point decrease to 1.99% p.a. (1.93% comparison rate*)
- Celebrate Investor P&I <60% LVR: 20 basis point decrease to 2.19% p.a. (2.19% comparison rate*)
- Evaporate Investor P&I 60-70% LVR: 25 basis point decrease to 2.24% p.a. (2.21% comparison rate*)
- Liberate Investor P&I 70-80% LVR: 30 basis point decrease to 2.29% p.a. (2.23% comparison rate*)
These product names refer to Athena's 'waterfall' rates, where customers automatically receive a more competitive interest rate as they pay down their mortgage.
Time to make the switch?
Athena notes home loan refinancing to other lenders increased by 28% in 2021 vs 2020.
Athena Chief Operations Officer and Co-Founder Michael Starkey said he expects this trend to continue.
"A lot of customers will be rolling off their one and two-year fixed rates they secured during the first lockdown and getting stung with a much higher variable rates, some of which can be over 3%," Mr Starkey said.
"It’s a great chance to switch to a provider who is on their side - and gives them rates starting with a 1."
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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 | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.54% p.a. | 5.58% p.a. | $2,852 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.49% p.a. | 5.40% p.a. | $2,836 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.64% p.a. | 5.89% p.a. | $2,883 | Principal & Interest | Variable | $250 | $250 | 60% |
| Promoted | Disclosure | ||||||||||
5.64% p.a. | 5.89% p.a. | $2,883 | Principal & Interest | Variable | $248 | $350 | 60% |
| Disclosure |
Image by Abby Savage via Unsplash.
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