86 400 makes buying or refinancing a property easier for Aussies

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86 400 has introduced a new 85% LVR tier for its home loans and removed Lender Mortgage Insurance (LMI) payments for customers with a 15% deposit or equity.

Typically, many people take out a home loan with at least a 20% of the property’s value saved up as a deposit, however some lenders allow customers to take out loans with lower deposits. 

If you take out a loan higher than 80% LVR you are typically subjected to paying a LMI fee.

Along with the removal of the LMI payments, the ‘smartbank’ dropped their other variable and fixed interest rates. 

The new 85% LVR product is available for owner occupied home loans with principal and interest repayments.

86 400 Neat Home Loan
  • Variable rates from 2.09% p.a. (2.10% p.a. comparison rate*) for 80-85% LVR
  • No service fees
  • Free extra repayments and redraws
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The Neat Home Loan may be a good option for borrowers who want to keep their costs to a minimum with low rates and low fees. 86 400 does not charge lenders mortgage insurance for its 85% LVR loans and offers borrowers flexibility when it comes to their repayment schedule. It also lets borrowers make extra repayments towards their loan balance for free. However, this loan doesn’t come with an offset account and it has a $250 upfront settlement fee.

86 400 Own Home Loan
  • Variable rates from 2.74% p.a. (3.02% p.a. comparison rate*) for 85% LVR
  • Free extra repayments and redraws
  • No Lender's Mortgage Insurance
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The Own Home Loan variable rates start at 2.74% p.a. (3.02% p.a. comparison rate*) for 85% LVR and it requires no LMI. There are also lower interest rates for borrowers who saved up bigger deposits (more than 20%) and can get rates starting from 2.14% p.a. (2.43% p.a. comparison rate*). With this loan, 86 400 gives borrowers the chance to have multiple offset accounts and unlimited free extra repayments. Borrowers are also given the flexibility to pick a repayment schedule to suit them: weekly, fortnightly or on a monthly basis. However, this loan has a yearly $250 service fee and a $250 upfront settlement fee.

86 400 Own Home Loan (Fixed)
  • 1 year fixed rates from 1.99% p.a. (2.42% p.a. comparison rate*)
  • Rate lock feature
  • Open multiple offset accounts
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The Own Home Loan (Fixed) rates start at 1.99% p.a. (2.51% p.a. comparison rate*) for a 80% LVR for a 1 year term based on the borrower’s LVR. Much like 86 400’s other loans, there is no LMI for borrowers with 85% LVR. The loan offers the ability to open several offsets accounts and the ability for borrowers to decide their own payment schedule. Extra repayments are free up to $20,000 per fixed rate term. However, the Own Home Loan has an annual $250 service fee and an upfront $250 settlement fee

“We know how tough it can be to break into the housing market and get ahead on your loan, so we’re helping home buyers get on the financial fast-track with smaller deposits or equity and very competitive rates,” says chief product and marketing officer, Travis Tyler. 

According to head of lending at 86 400, Melissa Christy, the company was always expecting a change to offer 85% LVR. And depending on what business it attracts, 86 400 will consider a further increase of LVRs. The expansion to higher LVRs is considered a minimal shift for the business, hence the removal of LMI on these loans. 

“We already have motions in place to overcome that risk of default and I feel like we don’t need to charge [LMI],” she says. “We are charging higher for the interest rate for these loans and it more than covers the incremental risk.”

With 86 400, Australians can complete their home loan application entirely online and may get approved in about a day. 

“Our whole goal is to make the home buying process easier,” says Christy.

86 400 is offering their Own Home Loan applications a head start by giving home buyers a $2,000 cashback for loans of at least $250,000, submitted by 30 September 2021, and settled by 30 November 2021.

86 400 began offering home loans in 2019, and since then their customers have been quite constant. Christy says that even though COVID-19 has affected the supply and demand of the housing market, the company hasn’t seen a drop of purchases or pre-approval.

If you are interested in the home loans 86 400 offers, check out Mozo’s 86 400 page.

* 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.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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