Athena slices variable mortgage rates for new and existing customers

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on January 18, 2022 Fact Checked
Athena slices variable mortgage rates for new and existing customers

While some home loan lenders have welcomed in the new year with rate rises, Athena has gone the other direction.

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

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
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AN EASY DIGITAL APPLICATION

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

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

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 May 26, 2022. View disclaimer.


Image by Abby Savage via Unsplash.

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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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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