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New mortgage lender launches rate-reducing home loan

OneTwo Home Loans, a new lender partnered by Lendi Group and 1835i, has launched into market with a mortgage that gives customers discounts on their interest rate as they pay it down.

After receiving venture capital support from ANZ Bank’s innovation partner 1835i and partnering with Lendi Group, the new digital lender, OneTwo Home Loans (OneTwo), has officially launched into market.

The new company, which was incubated and launched from the 1835i Creation Labs in 2020, has been formed to help borrowers pay off their loan sooner, while making savings along the way.

Its first home loan offering aims to up-end the “loyalty tax” model, and help borrowers pay off their mortgage more quickly, by automatically reducing the borrower’s interest rates as they pay off their home loan (up until they’ve paid off 25 per cent of the original loan amount).

For every 5 per cent paid down, OneTwo willl discount the rate by 0.03 per cent, to a maximum of 0.15 per cent. Its starting variable rate is 1.89 per cent per annum (1.79 per cent p.a. comparison rate).

The lender has also pledged to match any additional loan payments borrowers make in the first six months, up to $2,500 in total.

It has custom-built its own cloud-based lending platform and aims to help provide greater transparency to customers and simplify the home loan process by providing a video-based customer service experience.

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The first loan offering, not currently available through the Lendi and Aussie panel but available direct*, currently targets owner-occupiers in metro or inner regional Victoria, NSW and South Australia looking for variable rate loans with principal and interest repayments (up to $2 million). Borrowers must have a loan-to-value ratio of 80 per cent or less.

OneTwo has said it is currently developing loans for other customer segments, including investor loans, and aims to make a redraw facility available soon.

Speaking following the launch, OneTwo chief executive Derek Sheerin (formerly the venture director of ANZi, now known as 1835i) commented: “Australians love property, but the job of buying, owning, selling and financing is often tedious and just too hard. Our mission is to create new financial solutions that make it easy for people to achieve their dreams.

“We’re essentially a technology company here to launch first-to-market financial products to improve the lives of our customers – first up, we’re reinventing the Australian home loan.  

“By building our own platform, we’ve been able to fundamentally challenge the traditional processes people go through to secure a home loan.

“We are not just creating a digital, straight-through experience, we are trying to improve how people learn and discover what’s right for them. Speed, at the expense of customer understanding, is never a good thing – we work to the pace our customers choose is right for them.

“We’ve also radically reduced the traditional business cost to serve, with savings being passed on to our customers by way of a great rate and benefits.”

He concluded that by providing automatic rate discounts, a borrower’s loyalty would be rewarded.

“We want to help customers get the loan off their back sooner, while also offering an easy, entertaining and fast application experience where we do the heavy lifting,” Mr Sheerin concluded. 

“Put simply, we believe that home ownership is special and that the journey of getting there should be enjoyable.” 

Ron Spector, managing director of 1835i (formerly named ANZi), added: “OneTwo was one of the first ventures incubated and launched from the 1835i Creation Lab. They have developed and launched a unique customer experience and a radically new digital lending platform that will transform the mortgage experience.”
*This article was updated on 3 May to reflect that the product is not currently available on the Lendi/Aussie panel.

[Related: ‘Loyalty tax’ costs borrowers $9bn, finds neo-lender]

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