The home loan innovations changing the game for Aussie borrowers

With so many new home loan lenders emerging, traditional banks are feeling the heat when it comes to staying up to date with the latest in banking trends.

Following the Royal Banking Commission fallout, which caused many lenders to start tightening lending criteria and look more carefully at borrowers, more and more banks - both new fintechs and traditional lenders - are looking to technology as a way to stay in the game and entice creditworthy borrowers through their doors, literally or figuratively.

As a result, the banking industry is seeing a number of streamlined processes, better offers and new features appearing in the market.

For example, as a traditional bank welcoming digital times, St George bank has completely done away with paper-based applications, making the online lending process not only faster but easier.

St.George Head of Branding & Advertising Kate Kissane said their new online home loan application tool is particularly helpful for first home buyers.

“48% of first home buyers say they’ve put off buying a home because of the complexities of the application process,” she said.

“So we’ve built an entirely new online application platform to combat these frustrations and put the power back in the buyers’ hands, by going paperless.”

That’s just one of the latest lending innovations. Here are some more lenders with fresh features to suit different borrowing styles, that you might not have heard of yet.

Athena -  New Aussie digital lender

With so many Aussies relying on online technology to get through everyday banking tasks,  there’s no wonder there’s so many new online, digital and neobanks rapidly entering the market. 

According to J.D. Power research, last year digital platforms grew with an increase of 14 percentage points in mobile app usage. To keep up with this demand for convenient banking technology, new lenders are rolling out innovative online services. One, in particular, is online “home loan wrecker” Athena, which has recently burst onto the home loan lending scene. 

Backed by Macquarie Bank, Athena has one motto “pay off your loan quickly so you can have a home, not a loan.” Athena claims its banking values reflect Aussie borrowers’, with a need for more transparency in light of the Royal Commission. 

Athena Variable Home Loan Opening Special: 

• 3.49% interest rate (3.51% comparison rate*)
• no application, monthly or annual fees
• only available for refinancing

Check out our review of the Athena Variable Home Loan

Loans.com.au Zip Home Loan - Innovative loan features

Last year, veteran online lender loans.com.au launched the ZIP home loan. This is a low rate loan that also comes with an interest free $5,000 credit facility, which borrowers access with a visa debit card. 

At the time of the launch, Managing Director, Marie Mortimer from loans.com.au said, “the average credit card debt is about $3,200 - less than our $5,000 limit - and most people have only one card, so the Zip Home Loan with Zip Card really does enable them to say goodbye to credit cards forever while getting the same key benefits.”

With today’s cost of living pressures, innovations like this mean borrowers can make home loan repayments but still have the freedom of spending. 

Zip Home Loan key features:

• 3.67% interest rate (3.70% comparison rate*)
• Free extra repayments and redraw facility 
• Zip card Visa debit card

Virgin Money First Home Buyer Special - New offers for first home buyers 

Another lender hoping to take the pressure off first home buyers and make the
complicated loan process easier is Virgin Money, which recently
announced the First Home Buyer Special offer. The special gives Aussie
first home buyers the opportunity to earn 20,000 Velocity Points for
every $100,000 they borrow, with the aim of helping first home buyers
enter the property market, without feeling like they’re sacrificing
lifestyle habits like travel and dining out.

The offer is open to first home buyers who are eligible for the government First Home Owner Grant or First Home Buyer government stamp duty concessions and have applied for a Virgin Money Reward Me Home Loan before 31 May 2019, and
had it approved by 30 August 2019.

Bendigo Bank and Tic:Toc partnership - Faster applications

Bendigo Bank and Tic: Toc recently collaborated to create Bendigo Express, an instant home loan service.

The partnership offers borrowers a streamlined digital application
process, where they can go online and enter details such as their credit
history and identification and Tic:Toc then processes them digitally.
Because there’s no physical paperwork or human processing involved. 

Tic:Toc founder and CEO, Anthony Baum said, “Tic:Toc is changing the customer experience when it comes to home loans. It’s no longer necessary to wait weeks for home loan approval, when it can be done digitally and conveniently,” he said.

There are also a bunch more of innovative digital players entering the mortgage market with faster processes and low rates mixing up the system, so if you’re looking to borrow then it’s essential now more than ever to keep a check on what home loan options are out there.

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The
comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.