86,400 Launches New Laddered Variable Rates to Help Borrowers Save

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Australia’s neobank 86,400 has announced that it will offer tiered variable rates for mortgage customers, giving those with lower LVR (loan-to-value) the opportunity to access cheaper rates.

The new pricing system means borrowers with a deposit of at least 40% of the value of an asset can pay as little as 2.59% per annum (comparison rate of 2.87% per annum *). According to Melissa Christy, loan product manager at 86,400, this will go a long way in freeing up clients’ finances.

“We built 86,400 to help Australians take control of their money. By lowering variable loan rates for clients with more equity in their property, we are helping our clients do more with their money, ”she said.

The new rates went into effect on August 20, 2020 and will be available to all customers, including existing customers. The corresponding levels and rates for homeowners making principal and interest repayments are listed below:

• LVR ≤ 80%: 2.74% per year (comparison rate of 3.02% per year *)
• LVR ≤ 70%: 2.64% pa (comparison rate of 2.92% pa *)
• LVR ≤ 60%: 2.59% per year (comparison rate of 2.87% per year *)

Investors will also be able to take advantage of the new pricing system, with rates as low as 2.89% pa (3.17% pa comparison rate *) available. Below are the price ranges for investors making principal and interest repayments:

• LVR ≤ 80%: 3.09% per year (comparison rate of 3.36% per year *)
• LVR ≤ 70%: 2.99% per year (comparison rate of 3.27% per year *)
• LVR ≤ 60%: 2.89% per year (comparison rate of 3.17% per year *)

While LVR rate discounts are nothing new, they have become more popular in recent months as lenders seek to weed out low-risk refinancers from competitors. A lower LVR means borrowers are less likely to enter negative territory and be forced to sell during a downturn.

86,400 also offers $ 2,000 in cash back on the settlement to eligible borrowers. Offer is available for claims of $ 250,000 or more, provided they are received by August 31, 2020 and paid by October 31, 2020.

For more information, read our review on home loan 86,400. And if you’re wondering how the rates offered compare to others on the market, browse our home loan comparison page, where you can filter your search by rate and type.

* CAUTION: This comparison rate only applies to the example (s) given. Different amounts and terms will result in different comparison rates. Costs such as redemption or prepayment charges, and cost savings such as fee waivers, are not included in the comparison rate but can influence the cost of the loan. The comparison rate displayed is that of a guaranteed loan with monthly repayment of principal and interest of $ 150,000 over 25 years.

** The initial monthly repayment figures are only estimates, based on the advertised rate, loan amount and term entered. The rates, fees and charges and therefore the total cost of the loan can vary depending on the amount of your loan, the length of the loan and your credit history. Actual repayments will depend on your personal circumstances and changes in interest rates.

^ See information on the Mozo Experts Choice Home Loan Awards

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