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First neo home loan hits the market: how do the rates stack up?

First neo home loan hits the market: how do the rates stack up?

New kid on the block 86 400 has today started offering home loans, making it the first neo bank in Australia to do so.

86 400 is offering an owner-occupier variable home loan at 3.09 per cent, that’s paying principal and interest with an offset account.

RateCity.com.au research shows that there are currently 18 lenders offering comparable products at lower rates.

The bank is also offering 3-year fixed rates at 2.88 per cent for owner-occupiers paying and interest, but there are 15 lenders offering lower rates.

RateCity research director Sally Tindall said, “86 400 has put an affordable home loan option on the table just two months after launching.

“While their variable rate is significantly lower than the big four banks, if you’re focused on price, there are plenty of cheaper options out there,” she said.

Big four banks vs 86 400

Owner-occupier variable rates (with offset account)

BankInterest rate
86 400

3.09%

ANZ

3.89%

CBA

4.10%

NAB

3.87%

Westpac

3.44%

Note: Rates above are for owner-occupiers paying principal and interest with an offset account.

No LVR or loan size restrictions apply.

Owner-occupier variable rates (with offset account)

LenderInterest rate
Homestar Finance

2.74%

Reduce Home Loans

2.74%

Freedom Lend

2.79%

Pacific Mortgage Group

2.79%

G&C Mutual Bank

2.79%

Well Home Loans

2.82%

Tic Toc

2.84%

Mortgage House

2.89%

State Custodians

2.90%

Easy Street

2.95%

Citi

2.96%

HSBC

2.99%

Police Credit Union

2.99%

Bank of China

2.99%

Kogan Money

3.02%

ING

3.04%

Adelaide Bank

3.06%

Resimac

3.06%

86 400

3.09%

Source: RateCity.com.au

Note: Rates above are for owner-occupiers paying principal and interest.

Some loans have LVR requirements and other criteria.

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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