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Athena Home Loans 3.49% Owner Occupier, P&I / 3.51% Comparison Rate Refinance Offer w/ Auto Rate Match (No Back Book Pricing)

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Cracking launch rate from brand new home loan provider, Athena - provided you can meet the 80% LVR requirement.

Offer is for refinances only.

No fees (Except for Third Party Fees) and no redraw fees

Perhaps the biggest draw card is the claim for the like-for-like auto rate match which i read as a promise of no back book pricing, so you are on the same rate as new customers for the same class home loan. Other low margin lenders like Ubank (And generally all other lenders) will creep the rate up on their back book after they hook you in on a good new-customer rate.

Other rates appear exceptional as well:

Owner Occupied Principal & Interest: 3.49%/3.51%
Owner Occupied Interest Only: 3.99%/3.70%
Investor P&I:3.89%/3.91%
Investor Interest Only: 3.99%/3.95%

Related Stores

athena.com.au
athena.com.au

closed Comments

  •  

    An ADI with offset balance guaranteed?

  •  

    Loans.com.au is cheaper

    https://www.loans.com.au

    • +2 votes

      Initially only just, and I don't see any other lender that match back book pricing to new customer rates

      •  

        Agreed, loans basically used bait and switch, changing their rates for existing off the back of "funding crisis" yet kept it lower for new borrowers.

    • +1 vote

      Was with them they raised my rate after 12months making up some BS about cost of borrowing while keeping the advertised rate low. Classic bait and switch scam. Refinanced to homestar 3.54

    •  

      Wouldn’t recommend loans.com.au

    •  

      Yeah…I am with them…they have increased it to 3.93 now.

  •  

    wheres the bargain?

    Is there any further discount from the normal rate?

  •  

    Yeah its a good rate. What happens if they go out of business?

    •  

      Always a possibility, but it looks like they are backed by Macquarie, Hostplus and a couple of other big names so I'd say not likely

    • -1 vote

      You get a free house?

      •  

        haha sounds like it - no this was came through from someone I know in banking as a hot tip as they have been monitoring this, apparently staff at their bank are all making the jump. Just thought I'd share the love

    • +2 votes

      you get free house

      no, you continue paying your mortgage to whoever bought their books

      •  

        Yeah, I know, but are we in an age where someone actually WANTS to buy their books?

        I'm not sure that's a given anymore.

        If not, then what happens?

    • -1 vote

      Then u get to keep the house..

    •  

      Now that they offer Redraw.
      Is it possible that
      * I have decent amount of Cash sitting in Redraw to save interest
      * They went out of business and taken the Redraw away ($ is gone, no money in the company)
      * So I lost my Redraw but still owe a lot on the book

  •  

    Do they provide any cash back to cover up the government charges and other re-financing charges ?

  • +1 vote

    I believe this is only currently for refinancing existing loans.

    I'm keen to see how these guys go though when offering loans to buyers, I'll definitely be putting them on the shortlist based on what I've read so far.

  • +1 vote

    What does back book pricing mean?

    • +1 vote

      When a company offers better prices to attract new customers but their existing customers (The back-book) cannot benefit from the new customer pricing.

      This is universally practiced by all lenders in Australia - When you get a loan at at an advertised rate as a new customer you benefit from that presumably great rate for awhile, then usually after 12 months your rate starts to increase little by little. You then notice that you're paying a much higher rate the same product being offered to new customers.

      You see this often with telcos too where you might be paying more for your internet or phone compared to what is being offered to a new customer.

  •  

    My point would be this - often lenders create 'new' loan types and give it a new fancy name. The 'old' loan type then faces all the rate increases. Seen it happen many times in lending.

    •  

      Their stated definition for a like-for-like rate match loan is

      "A like-for-like loan is the combined purpose, repayment and rate type you have, such as 'Owner Occupier, Principal & Interest Variable Rate' or 'Investor, Interest Only Variable Rate'. If we ever tempt new customers with a lower rate for an Athena 'like-for-like loan', then anyone who's on it will get the automatic rate-match. Sweet."

      I could be wrong, but that pretty much sounds like it could only be one of the eight types of loans (variable and fixed versions of the four listed in the original post)

  •  

    Not easy to get pre-approval as advertised.

  • +1 vote

    Shame there's no offset account. The redraw creates tax implications.

    • +1 vote

      Hey NPH,

      Could you expand a little bit? Would like to know how this works.

      Thanks

      • +1 vote

        in short, you can't claim tax back on loan interest paid on the portion of money that you redraw out to buy your new home to live in while renting out your old one at later stage.

      • +1 vote

        If you have a 500k property and 100k cash, consider two scenarios:

        1: PPOR:
        If you put your 100k of cash in the redraw account, and if you later redraw it for investment purposes you’d have to prorate the interest component of the mortgage payments (20%) as a deduction (which is obviously more beneficial than just investing the cash 100% in the investment as you’re now getting a deduction at the mortgage rate). Though simple at first, multiple redraws & payments can quickly make things complicated especially if there’s a mix of investment and non-investment activities.
        Bear in mind that if you decide to switch the property to an investment property down the track and you want to access that cash in the redraw account you won’t be able to claim the portion you withdrew as a deduction unless it’s used for investment purposes.

        2: Investment property:
        Again, if the cash goes in the redraw account and is then used for non-investment purposes you won’t be able to claim the increased interest expense (100k/500k=20%) as a deduction. You’d have to prorate this portion of your mortgage payments.

        Offset accounts are a clean way to reduce your interest expense without creating these tax complications so I will always avoid mortgages without them. The best option is to have mortgages with a bank with multiple offset accounts. This way you can have family members contribute to a particular offset account or even have a cleaner looking bank statement hiding credit card payments etc that sit in another offset account if you need to apply for another mortgage.

  •  

    These guys had a big campaign. Home loan wrecker etc and then they launch an online bank (with no service or relationship offering) with nothing new…. History is important and this business is made up of ex NAB staff who want to make a quick buck and capitalise on the fact that there is so much apathy and inertia in banking. They are not customer owned so I would not recommend.

    •  

      fair enough, pretty early judgement on a company with little to no history yet though. I'd also argue that rate matching for the back-book is something new, game changing even if the model works.

      •  

        May I ask how it is game changing?

        •  

          Do you know of any other lender that guarantees a rate match to new their new customer rate? i.e. no separate back book pricing.

          I can see this working with a start up like this, but almost unheard of with any established lender to implement because they would stand to lose millions in revenue.

          •  

            @Cunning Linguist: Every bank will do that. The difference is I assume Athena will automate this process (rather than the customer calling up to prompt it). If they don't [automate it] you would have to call BS on this claim.

            Also as you state Athena are hamstringing themselves by the fact any movement on the rate would have a direct revenue impact, hence slower and resistant to move.

  •  

    What's the setup fees? Should be in the title.

    •  

      For me living in NSW I they quoted about $700 that's if they need to do a valuation (roughly around $350) and then the rest was the state government charges. They may not be exact figures, but from just what I remember. Definitely wasn't more than $800.

      •  

        That's seem ridiculously high cost for a valuation, considering most valuations are completed electronically.

        •  

          Join a customer owned bank and you will get the relationship and give back to your communities they will waive all set up costs and give it a good crack at matching the rate.

        •  

          That valuation cost was the highest range if they have to come out. If they do it electronically then I assume it would be free or much lower. Was just quoting the highest cost they gave me.

          The rates are extremely competitive though, next cheapest I could find was uBank at 3.59%, so even if you paid the $800, you would have your money back in 2 years from savings on repayments.

          I don't think a community bank would be able to match the 3.49% but definitely agree they would give back to the community, provide you better customer service and expert advice. My initial impressions from Athena are there customer service representatives are not great and would not give you expert advice (the person I spoke to had to check some answers for some of my questions), but for someone like me who just wants a cheap loan, with no frills to pay it off quicker its a good deal.

    •  

      It's in the main post - no fees except for third party (i.e any government charges, perhaps valuation etc)

  •  

    Curious about the comments about no back book pricing and rate creep of low margin sellers such as ubank. Coming from bankwest i only recently got my 4.23 or something % lowered to 3.9 o. P&i ,still between 85-90% lvr. Id always seen great rates for low towards 3.5% area on 80% lvr on providers such as ubank and was saving lvr up to make the refinance switch.

    Do they bait and switch with much higher rates after?? So initial feel good rate of the ubank isnt that good after all for example??

    •  

      Depends on how good of negotiator you are really. By default you will usually see rate creep, but if you or your broker are a good negotiator and you have an attractive loan (usually high value, low LVR with good payment history) that the bank wants to keep and you are prepared to have that chat with your lender every year or two you might be able to maintain a good rate - YMMV

      •  

        thanks. I guess the one thing I"m missing is a low LVR (88%, looking to get below 80% by saving in my offset as i assume that's where the bargaining chip comes into place).

        It seems lenders like Bankwest who I'm with have a set script and minimum whereas big 4 customers seem to have a varying point of discretion given the stories of different people getting varying success rates and %'s when ringing up to negotiate….

        Is it generally best to push for a change and then feign closure with the customer retention team? Or do they usually give you a decent rate after some decent negotiation without the need to go through the fake "close my account now, i've had enough" approach?

        •  

          Good quality loans are a battleground for the banks - so if you have <= 80% LVR, high value loan, owner occupied low risk property with a good credit history there's a good chance they will want to keep you with a better rate. I would stress against this may not always be the case and YMMV - good example from @harryzee above who had 50% LVR on a $700k loan but Ubank refused to budge after upping his rate by 0.75% - could be other factors at play here though that we don;t know about.

          The property market is generally not in most people's favour to refinance now - unless you live in Tasmania, with falling house prices your current LVR could be much higher than your original LVR, so keep that in mind if your house is revalued for a new loan. Lenders also know this and that it might be difficult for you source a new loan elsewhere so they may use that against you and call your bluff.

  •  

    I've applied a refinance to them yet to hear about a response. However I'm on double mind now.
    I'm with the big four, rates was 3.98, then 3.95, then 3.87 till an increase earlier to 4.02%. So I've been on 4.02% for 5 month now.
    100% multiple offset accounts linked. 80% LVR
    $395 a year package fee of course, that waived the premium credit card annual fee however.

    The rates is definitely tempting.
    Guess worried about what if they go out of business, what happens to my redraw.
    And the implication on if I want to take the redraw out and purchase a new home, would stay with my bank make it easier as these guys don't do purchase yet
    I've tried to ask my bank customer service to review my rate. They said 4.02% is very low already and I've done a review within a year.

  •  

    Hey everyone, I'm from the Athena team and have asked the mods to update the post with the end date for our opening offer rates. The opening offer ends Monday, 25 March 11:59AM AET and after this, we'll have our regular rates available. Also let me know if you have any questions!

    •  

      Hi icedtea229

      If you could elaborate on a few of the key questions that would be great

      • What will the rate be post promotion, can we expect this to remain competitive with other low margin lenders? And will we see our rates jump up immediately post promotion to the new customer rate?
      • Some questions about what happens if you go out of business - can you elaborate on who you are backed by and what would happen in this situation
      • What is the waiting period for the rate adjustment if you reduce you new customer rate? Is this automated or do you need to be prompted?

      Thanks

      •  

        Hey Babadook,

        Great questions! I've answered them below. Let me know if you need more info.

        • What will the rate be post promotion, can we expect this to remain competitive with other low margin lenders? And will we see our rates jump up immediately post promotion to the new customer rate?
          Our regular rates are:
          Owner occupier, principal & interest: 3.59% variable, 3.57% comparison rate
          Owner occupier, interest only (up to 5 years): 4.09% variable, 3.77% comparison rate
          Investor, principal & interest: 3.99% variable, 3.98% comparison rate
          Investor, interest only (up to 5 years): 4.09% variable, 4.07% comparison rate
          Our regular rates are among the lowest in the market and with our automatic rate‑match guarantee, where our existing customers get the same rate as our new customers on our like-for-like loans, you don't have to worry about new customers getting lower rates than you.
          If you are a customer that signed up on our opening offer rate, your rate will not jump up to our regular rate as you received the loyalty bonus upfront and doubled to give you 0.1% discount off the regular rate. E.g. if you signed up to our Owner occupier, principal & interest opening offer rate, you received 0.1% discount on the regular rate of 3.59%, making the rate 3.49%.

        • Some questions about what happens if you go out of business - can you elaborate on who you are backed by and what would happen in this situation
          We're backed by some big investors and they include Macquarie Bank, Square Peg, Hostplus, Rice Warner, Apex Capital, RESIMAC Group and AirTree Ventures. Our investors and us think it's extremely unlikely that we'll go under but if this does happen, we have what’s called a ‘step in servicer’. Your loan would be transferred to another provider, who will honour our mortgage agreement with you.

        • What is the waiting period for the rate adjustment if you reduce you new customer rate? Is this automated or do you need to be prompted?
          If we tempt new customers with a lower rate for an Athena like-for-like loan, then anyone's who is on it will get the new rate automatically. Customers don't need to do anything and it will take effect immediately when the lower new customer rate is effective.

        •  

          Doesn't this mean that in fact you do have back book rates given that you now have loans at different rates. (The opening offer rate and your standard rate)….If this is so where is the line drawn moving forward if one was to move over to you?

          •  

            @kinpe: Hey kinpe,

            We don't do back book pricing. During our grand opening offer period, we offered customers a 0.1% loyalty bonus for the lifetime of their loan. Instead of rewarding customers with 0.01% discount on their rate for each of the first 5 years, we gave it to our customers upfront and doubled during our opening offer.

            Our standard variable rates have remained the same from when we launched. The opening offer was the doubled loyalty bonus paid upfront, which meant customers were getting 0.1% discount off the standard variable rate.
            E.g. Owner occupier, principal & interest rate went from 3.59% variable to 3.49% variable with the discount.

            The opening offer is now over but our standard variable rates have remained unchanged. For customers signing up to our rates, we'll reward them with a 0.01% discount on their rate for each of the first 5 years just for making their repayments. That adds up to a massive 0.05% off their loan!

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