Athena “the home loan wrecker” launches its low rate online mortgages today
The company is backed by big investors and uses digital tools to make mortgage applications easier and potentially cheaper.
Athena launched its home loan product today, a competitive variable rate mortgage for owner-occupiers and investors with an online application process. For now, it's only available for refinancers but will soon be open for new buyers too.
With its lowest rate offer of 3.49%, Athena has one of the more competitive rates on the market. They're calling themselves "the home loan wrecker" with a message that's straightforward: get your home loan and get rid of it fast.
There's a lot of talk about disruption in the mortgage industry. And it's certainly an industry ripe for revolution. The Big Four banks are still the dominant players. Applications can take a long time and mortgage brokers are a popular avenue for confused borrowers in need of help. The Royal Commission shows the need for fresh ideas and new players.
But while many neobanks and fintechs are planning to change the mortgage world, there are still very few real alternatives to a normal bank on the market today.
There are online lenders like loans.com.au and UBank, who do everything online or by phone, and keep their interest rates quite low and offer a range of products. And there's Tic:Toc, which launched in 2017 with a high-speed algorithmic application process and a competitive offer.
Athena is a little different to all these companies. It isn't a bank, and it's not exactly a neobank although their method of disruption is similar. They're only offering mortgages, not a suite of traditional finance products. They're backed by big banks (and many of their senior leadership are ex-bankers), but they're lending directly to customers as a non-bank lender.
How does Athena stack up?
- Rates. Athena's rates are low (though not the absolute lowest on the market).
- Offers. It has rates for investors and offers interest-only repayments too.
- Fees. It keeps fees down to almost nothing (only third-party fees for valuation and settlement costs).
- Low rates for all. Athena's current rates are introductory offers, but it promises that "Existing customers score the same sexy new customer rates on our like-for-like loans."
- Requirements. For the moment, you need to be living in a major city to get an Athena loan and you need to be refinancing. This will almost certainly change soon.
- Online application. Athena's application system looks great and easy to use, though we didn't complete the whole application (that would require a deposit and a property).
There's no doubt Australians are losing out by not refinancing. We crunched the numbers and found that the average Australian borrower could save $58,000 over the life of their loan by switching to a lower rate.
Whether Athena truly becomes "the home loan wrecker" or a competitive, forward thinking player in a big market, the outcome is likely to be positive for Australian borrowers.