SYDNEY, Australia – Athena, a new online lender in Australia, is working to reshape the home loan history in the country.
The new home loan lender is trying to get rid of its customers, changing the lending game entirely. For the fourth time in a row, Athena passed on the full rate drop from the Reserve Bank of Australia (RBA) for both their existing and new customers. Effective immediately, the variable rates they are going to offer clients will be 2.59% p.a. for owner-occupiers and a comparison rate at 2.55% p.a.
From the statement published on their official website, Athena said that as of 2:30 pm on Tuesday, March 3, 2020, the RBA has announced a cash rate drop if 0.25%. It noted that lenders usually choose to pass a portion of the rate drop or none, but Athena is among the first to impose the rate cuts in June, July, and October last year. Right now, Athena will immediately slash their cash rates again, and in full RBA cut, according to their statement.
Athena is the only creditor to pass on the entire rate cut from the RBA immediately for the last four announcements.
Meanwhile, this is not the only circumstance that has put Athena in a unique spot in the lending industry. Following its recent launch, the new Aussie online lender has jolted things off with force. It introduced an unconventional attitude when it comes to lending, shaking things up in the mortgage market.
During its launch, Athena introduced itself in public as a home loan wrecker. The new Aussie fintech follows their motto, which is “love us and leave us.” The overall philosophy it follows, according to the lender, is to urge Australians to pay off their loans as quickly as they can for them to have a house, and not debt.
Athena is relatively new in the market. Right now, the online lender only offers its customers principal and interest refinancing for home loans, which is available for investors and owner-occupiers. However, Athena hinted on more and better products coming in the future.
According to Peter Marshall, a banking expert at Mozo, the country is starting to see an increasing number of emerging fintech as up and coming lender. He said that a lot of them offer real and good value for borrowers, and Athena is among that group.
Mr. Marshall explained that a lot of Australians are starting to search for good value in their loans and better alternatives to traditional banks, especially after the Banking Royal Commission. He said that Athena became public in the middle of this search and had built itself as an excellent alternative to big lenders.
Compared to other lenders, Athena encourages its borrowers to pay off their debts as soon as possible. In short, they are trying to get rid of their customers asap. And while it offers home loan refinancing for its clients, Athena is not a bank and doesn’t offer credit cards, savings accounts, and bank accounts to e.
The new Aussie online lender provides refinancing options for mortgages free of charge and with meager rates, fab features, and loyalty bonuses. Athena also includes free redraw facility and free additional repayments. Home loan features from the lender include no application fees required and no monthly, annual, or exit fees as well. It offers flexible home loan terms that range from two to 30 years with a choice for repayment options, which can either be weekly, fortnightly or monthly.
The only fees that customers have to pay when taking out home loans from Athena are valuation fees and third-party legal fees, which are standard requirements for any home loan application. And while the new lender is not a traditional bank, it uses bank-level kind of encryption and security all over its digital platform. Athena is under the authority of the Australian Securities and Investments Commission (ASIC) and conveys an Australian Credit Licence.
According to the co-founder of Athena, Michael Starkey, lenders often only offer rate cuts to their new customers. It often leads to their existing and loyal clients missing out.
But in Athena Home Loans, they apply a rate-match automatically. It means that if the lender comes out, offering a low rate for their new customers, the same will apply to the home loans from their existing borrowers.
Mr. Starkey further stated that they are challenging the entire lending industry to follow their example and pass on the RBA rate cut immediately for both new and existing borrowers. This way, he said, all Australians can benefit from the recent rate cut.
He also explained that following the launch of Athena Home Lonas in February last year, they were able to save around $150 million for a lifetime of loans for Aussie households. On average, Mr. Starkey said, Athena helped kick off three years of loan repayments for their borrowers.
Starkey continued that as one of the rapidly growing fintech in Australia, Athena Home Loans will continue to offer excellent rates to all its customers.
According to the CEO and co-founder of Athena Home Loans, Nathan Walsh, from the 12 biggest home lenders in the country, none have decided to pass on the entire RBA rate cut. He also said that the money saved from the rate cut should be in the pockets of Australian households.
Meanwhile, the four rate cuts from the RBA since June last year has now slashed the cash rate by a full percent. Passing on the entire RBA cut can save an Aussie household around $80,000 from a typical house loan over their mortgage period. If they continue with their existing home loan repayments following the cash rate cuts, savings for every household could rise to $120,000 and reduced their home loan period of around five years.
Unfortunately, none of the 12 of the giant home lenders in the country passed on the full amount of the three previous three rate cuts from the RBA. Even a 2-week delay in the total savings from the rate cut, lenders cost Aussie households up to $350 million. Because of this, Australian families are facing staggering costs, a significant falloff from the sustainable growth efforts that the central bank is trying to provide.