UBank removes IMT for 15% of deposits, Athena cuts variable rates

UBank is making it easier to enter the real estate market with smaller deposits while Athena has reduced variable mortgage rates.

Starting today, NAB’s online lender and affiliate, UBank, will allow homeowners to buy a home with a 15% down payment without having to shell out for Lender’s Mortgage Insurance (LMI).

This is down from the standard LMI threshold of 20%.

According to UBank, homeowners could save $ 5,000 in insurance costs on an average loan of $ 480,000 by saving for a deposit of $ 72,000 (15%) instead of $ 96,000 (20%).

Buying a house or looking to refinance? The table below presents home loans with some of the lowest interest rates on the market for homeowners.

Basic criteria: a loan amount of $ 400,000, variable, fixed, principal and interest (P&I) mortgage loans with an LVR (loan to value) ratio of at least 80%. If the listed products have an LVR

UBank CEO Philippa Watson said the major change would mean Australians could enter the market seven months earlier than if they had to pay LMI up front.

“We are passionate about helping Australians get home, but we know that saving for a home deposit takes an average of 4.6 years, rising to over eight years for people in Sydney,” Ms Watson said.

“By requiring only a 15% down payment and waiving the need for LMI, UBank can help cut the process by almost seven months.”

Related: Gateway Bank Will Allow Customers To Make Separate Monthly Repayments On IMT

UBank loans available with this offer include a variable rate of 2.49% per annum (comparison rate of 2.49% per annum *), or a three-year fixed rate of 2.05% per annum (comparison rate 2.41% per annum *) for owner-occupants making principal and interest (P&I reimbursements).

Ms Watson said LMI, which can reach tens of thousands, is an additional expense that borrowers can do without.

“We know the appetite for home ownership continues to grow, with 56% of Australians who do not yet own a home excited about the prospect of owning one, up 13% since July of the year last, ”she said.

“But saving for a deposit can make the big Australian dream seem like it’s out of reach.

“LMI can add tens of thousands of dollars to a borrower’s loan. At UBank, we believe this is an added expense that our customers can do without. “

Athena cuts variable rates by up to 20 basis points

Online lender Athena has reduced interest rates on a number of its homeowner and investor home loans.

Lower Athena rates for owner-occupiers

  • The Celebrate P&I Variable Home Loan for borrowers with an LVR of 60% has been reduced by 20 basis points to 1.99% per annum (comparison rate of 1.99% per annum *).
  • The Evaporate Variable P&I Home Loan for borrowers with an LVR of 60-70% has been reduced by 15 basis points to a new low of 2.09% per annum (comparison rate of 2.02% per annum *) .
  • The Liberate variable home loan for borrowers with an LVR of 70-80% has been reduced by 10 basis points to 2.19% per annum (comparison rate of 2.08% per annum *).

Athena rate cut for investors

  • The Celebrate P&I Variable Home Loan for borrowers with an LVR of 60% has been reduced by 15 basis points to 2.39% per annum (comparison rate of 2.39% per annum *).
  • The Evaporate Variable P&I Home Loan for borrowers with an LVR of 60-70% has been reduced by 10 basis points to 2.49% per annum (comparison rate of 2.43% per annum *).
  • The P&I variable Liberate mortgage for borrowers with an LVR of 70-80% has been reduced by 5 basis points to 2.59% per annum (comparison rate of 2.48% per annum *).
  • Investors making interest-only repayments (IO) with an LVR of 60% received a reduction of 15 basis points to 2.69% per annum (comparison rate of 2.50% per annum *).

Government announces new home buying measures

The changes come after the federal government announced a series of new measures to help Australians buy their first homes earlier under the upcoming 2021-22 budget, which will be unveiled on Tuesday.

Among the measures is the Family Home Guarantee, which will allow 10,000 single parents each year for four years to buy a house with a 2% down payment from July.

The first home loan deposit system, now called the “ New Home Guarantee ”, will be extended for a second year, offering 10,000 additional places in 2021-2022.

Under this program, first-time buyers can buy a newly built house or build a new house with a down payment of 5%.

The maximum amount of voluntary contributions that can be released under the First Home Super Saver program will be increased from $ 30,000 to $ 50,000.

Photo by DocuSign on Unsplash

The entire market was not taken into account in the selection of the above products. Instead, a smaller part of the market has been envisioned, which includes retail products from at least the Big Four banks, the top 10 customer-owned institutions and Australia’s largest non-banks:

Products from some vendors may not be available in all states. To be considered, the product and price must be clearly published on the product supplier’s website.

For the sake of full disclosure,, Performance Drive, and are part of the Firstmac group. To find out how handles potential conflicts of interest and how we are paid, please click on the links on the website.

*Comparison rate is based on a loan of $ 150,000 over 25 years. Please note that the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redistribution fees and cost savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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