Ever heard of a bank or mortgage lender that wanted to help you pay off your home loan? And one that would reward you along the way by giving you discounts off your interest rate when you pay more off your home loan? Me neither…until now.
Athena Home Loans have just launched this first, one of a kind home loan and after learning more about the ins and outs of this new loan, I am impressed.
Impressed because Athena are making it easier than ever before, in helping Australians realistically pay off their home loan as quickly as possible. Saving valuable time and interest. But best of all, helping Australians go on and live their best life, mortgage free.
Being mortgage free, is not only one of Athena’s financial goals for everyday Australians, but also one my financial goals. And an important message that I am getting more Australians to see the value and importance of when it comes to knuckling down on one of the biggest financial burdens, particularly right now, in a record low interest rate environment.
This new loan product is called “The Athena Accelerates” and the interest rate drops automatically as you continue to pay more off your home loan. Based around your Loan to Value ratio, (LVR) which is a simple calculation where you divide your current loan amount by the most recent property valuation of your home. The lower your LVR, the lower your Athena Accelerates interest rate, potentially getting as low as 2.39% p.a. as you break through their 3 tiers.
Say for example your loan amount is $550,000 (excluding any money in your redraw) and your home’s most recent property valuation was $750,000. This would mean that your LVR is 73%, ($550,000/ $750,000) so you would qualify for a discounted interest rate of 2.54% p.a.
If you can stick to your budget and when you can afford to, make a few extra mortgage repayments along the way (possibly from the new savings from your new lower interest rate), your mortgage should start reducing at a faster speed, making bigger, better progress.
As your mortgage reduces, to say $500,000, your new LRV would now be 68 ($500,000/$730,000), meaning that you would qualify for another discount off your interest rate, reducing it to 2.49% p.a. officially breaking through Athena’s Tier 1, to Tier 2.
These discounts continue on to Tier 3, with your mortgage dropping further and your LVR 60% or below, taking your interest rate from 2.49% p.a. down to 2.39% p.a. And what is even more efficient, is these discounts are automatically applied to your loan. So no long phone calls or haggling with anyone, they just give you these discounts, you don’t even need to ask. And that is on top of Athena’s no fees policy.
You need to know that the loan amount excludes what you may have in your redraw facility (because this money can be drawn at any time and it would increase your LVR again) and the valuation is based on the most recent property valuation. You can choose to move money from your redraw into your loan in order to access one of the lower tiers should you want to. Athena can help you work this out.
I can’t stress enough the importance of making hay whilst the sun shines. Use this record low interest rate environment, combined with a discounted loan product (like the Athena Accelerates) to get ahead of your mortgage. Not only are you going to save valuable time and interest, but you are going to feel engaged and connected with your financial wellbeing again as you see the impact of these discounts reducing your mortgage faster than ever before.
Good luck and let me know how you go.
Canna Campbell is the founder and director of SASS Financial Services, a boutique financial planning firm. She is Channel 9’s exclusive ‘money expert’, founder of financial media platform SugarMamma.TV and best selling author of The $1000 Project and Mindful Money.