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Digital lender launches home loan offering

Athena Home Loans has marked its entry into the Australian mortgage market with the launch of a new home loan offering.

In a bid to provide borrowers with a “genuine” credit alternative, Athena Home Loans has announced the launch of owner-occupied principal and interest home loans with interest rates starting from 3.49 per cent, and investment home loans with rates starting from 3.89 per cent.  

Athena’s offering is limited to refinancers, with the lender noting that it will launch home loans for new purchases later this year.

Athena’s launch coincided with its release of research conducted by CoreData, which reported that the “trust gap” between lenders and borrowers has widened off the back of the banking royal commission.

According to the research, which involved a survey of 1,000 borrowers, respondents cited that the most common reasons for the widening of the trust gap were because lenders “ripped people off” (77 per cent), “were dishonest” (71 per cent) and lacked transparency (66 per cent).

The survey also found that only 25 percent of mortgage holders think their existing lender cares about their financial wellbeing, and only 21 per cent think their lender acts in their best interests.

Further, nearly all borrowers (93 per cent) said they want to pay off their mortgage faster, but less than 20 per cent think their lender wants them to succeed.

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Almost half (43 per cent) of surveyed respondents who bank with a major lender said they are considering switching lenders as a result of the banking royal commission, with 79 per cent stating they would switch if it meant they were able to pay off their home loan sooner.

Respondents said that other factors that would influence their decision to switch include a better interest rate (79 per cent), lower fees (75 per cent), flexible features (44 per cent) and better customer service (47 per cent).

Reflecting on the findings, Athena co-founder and CEO Nathan Walsh said: “The royal commission has shone a bright spotlight on a badly broken system. Legacy players are not incentivised to help borrowers achieve their goals.

“Customers have told us they want to pay off their home loan faster, and this is exactly what Athena is here to help them do.

“Our goal is to get customers a great home loan and then help them get rid of it. After all, time is money. The shorter your loan, the less you pay.”

Athena said it would provide borrowers the means to paying off their mortgage sooner by:

  • Offering consistently low rates to new and existing customers
  • Encouraging borrowers to sustain the repayments from their prior lender by allowing refinancers to customize their loan term
  • Waving application, account or exit fees
  • Offering a fee-free redraw facility
  • Allowing borrowers to customise their repayment cycle

“We are already seeing families switching from typical big bank rates and using Athena’s home loan hacks to manage their loan, saving tens of thousands of dollars and cutting years off the life of the loan,” Mr Walsh said.

“Many customers are surprised at the scale of the savings potential and what it can mean for them financially after years of being loyal bank customers.”

Additionally, with Athena’s research revealing that 74 per cent of big bank borrowers think that new customers are treated better than existing customers, the lender has committed to apply the same rate changes for both new and existing customers.

Athena co-founder and COO Michael Starkey added: “Forget the honeymoon rates that never last. Athena has listened to customer demand for a great rate that stays great.

“Our pricing promise is that we will never charge existing customers more than new customers on a like-for-like loan. It’s an Australian first, and only fair.”

He continued: “The stakes are high and its easier than you think. Nearly half of borrowers (46 per cent) said they don’t know the current rate on their loan, and the banks are counting on it.

“Take a moment for a quick home loan health check. Confirm your rate and see if you’re one of the people being taken advantage of. The savings opportunity may be bigger than you think.”

[Related: Mortgage fintech closes $25m capital raise]

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