Athena Home Loans Raises Rates by 0.65%

jv hi fi on 14/07/2022 - 09:51
Last edited 14/07/2022 - 10:29 by 1 other user

Got the email this morning from Athena Home Loans:

Our response to the RBA cash rate increase

Sorry. We have to increase our rates by 0.65% (65bps) which will be effective today, 14 July. This is slightly above the RBA increase of 0.5% (50bps). Our cost of funds is driven by more than the Cash Rate, and these funding market costs have spiked significantly in recent months.

We have passed on many extra rate drops to you over time and held out for as long as we can to avoid needing to increase our rates to cover these new additional costs, but we simply can’t absorb them any longer. Many other lenders are in the same boat already, and many will be soon. Some are sneakily passing them onto existing customers and discounting for new customers. We don’t do that. But we do need to run a sustainable business and make sure you’re saving as much money as you can.

What doesn’t change is that we will continue to save you a bundle in interest costs, not charge fees - for anything, and put you in control of dropping your own rate with Accelerates. We'll continue to keep your rates as low as possible and avoid future raises unless we absolutely have to.

Wish we had better news. There’s an email in your inbox with more details. Shout out if you have any questions.

I've been happy so far with the service since refinancing in May but I'm concerned they may go above the RBA increase for future rate rises. If you're an Athena customer, will you be staying or refinancing?

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Comments

  • jv on 14/07/2022 - 09:54
    -5

    Athena Raises Rates

    The goddess of wisdom, handicraft, and warfare?

  • jv on 14/07/2022 - 09:55
    +4

    If you're an Athena customer, will you be staying or refinancing?

    If you're an Athena customer, you'll most likely go to the cheapest provider…

    • CyberMurning on 14/07/2022 - 10:11
      +3

      obviously…… no need to ask….

    • HeWhoKnows on 15/07/2022 - 17:19
      +3

      Its not the increase that counts.
      In fact that is rather irrelevent.
      Its the new rate that counts.
      So how does Athena's new rate compare with others?

  • Ocker on 14/07/2022 - 10:11
    +6

    Guess they have got to cover the cost of all their inane adverts on radio

    • pharkurnell on 14/07/2022 - 10:23
      +2

      Theres other ads apart from Sportsbet?

      • donga100 on 14/07/2022 - 10:29
        +1

        You haven't seen Ladbrokes, Bet365, PalmerBet, Neds, TAB or The Lott?

        • iChopstick on 14/07/2022 - 11:44
          +1

          Manscaped, ExpressVPN and Raid: Shadow Legends for me

          • Cluster on 14/07/2022 - 14:45
            +1

            @iChopstick: Don't forget SurfShark and NordVPN.

            Hackers around every corner, constantly trying to steal your data. Sigh.

  • dixy on 14/07/2022 - 10:24

    Just refinance to another one with better rate when you can.

    • CyberMurning on 14/07/2022 - 10:34

      if cannot then just suck it up and get second job to afford

  • Seraphin7 on 14/07/2022 - 10:26
    +11

    What they've said in their note is 100% accurate … the cost of credit is increasingly rapidly with the RBA cash rate an indicator only of movements in the money markets.

    Lenders can broadly only source funds from either deposits or debt capital markets. Athena doesn't have access to the former, and in the latter will be effectively limited to mortgage securitisation markets (they'll have limited access to corporate debt facilities secured by their own balance sheet).

    The cost of credit in the securitisation markets is rising in advance of RBA movements, both in expectation of future rate rises and factoring in increased potential lending losses. Since outfits such as this don't offer deposit products, they can't use these to insulate themselves from rising costs in the markets in the way the major banks can.

  • Neoika on 14/07/2022 - 10:42
    -4

    One day before the majors and immediately effective. Very poor form!

  • Typical16-bitEnjoyer on 14/07/2022 - 10:55
    +1

    Company lures new customers in, then raises prices. Shocking stuff.

    • TilacVIP on 15/07/2022 - 11:39

      Nothing personal, just business.

      Depending on the get out terms and conditions [if people who take out loans don't bother to know this, its on them ] people are free to choose to refinance with another bank.

  • micsway on 14/07/2022 - 11:05
    -1

    I'm surprised but guess they still cheaper than most

  • FatBoyNotSoSlim on 14/07/2022 - 11:09
    +4

    The additional 0.15% just offsets the out-of-band drops they provided last year. With the cost of funding going up, they need their profit back. All in all, still the cheapest rate for my situation. Now if only they had a working offset account that could be used like a real account.

    • BigTed on 14/07/2022 - 11:21
      +1

      ^^^ This.
      I will stay with Athena as long as they offer the best rate I can get, but it would really help if they would actually offer a real offest account that works like an actual account.

      • Sunny84 on 14/07/2022 - 11:25

        what does the current offset account lack?

        • FatBoyNotSoSlim on 14/07/2022 - 11:29
          +2

          No card, no Bpay, no direct deposit functionality (this was the state at launch, some features may have gradually arrived since then)

        • MrMarket on 14/07/2022 - 20:18
          +2

          because they are not a bank, they are just a lender
          to do all these things you need a banking license and oversight and regulations

          You really can't have both ways, really cheap basic loan or loan with the added extra and it will cost more

  • gaz3342 on 14/07/2022 - 11:39

    I'm sticking with them for now but if they increase higher than the cash rate next time I'll start looking elsewhere.

    Only thing is, other lenders may have lower rates for a short while but there is nothing stopping them increasing higher in future.

  • Hawkeye9 on 14/07/2022 - 14:07

    I'm currently with Athena….anybody got some good ideas on who to switch to?

    • MrMarket on 14/07/2022 - 20:27
      +3

      This problem is not unique to Athena, all the ones that operated on this model in the last 5-10 when cost of debt are cheap
      will be facing much more expensive debt going forward so they all will be passing on bigger increases if their funding cost increases

  • MrMarket on 14/07/2022 - 19:57
    +5

    that the reality of most small lenders people doesn't understand
    when money is cheap and people are willing to throw them any amount of money, these guys can offer very cheap rates because they don't have a deposit based

    but when rates start to rise, their debt will become a lot more expensive than the banks so they have to pass on bigger increases
    they can still be competitive with banks and offer lower rate but get used to bigger rate hike from all smaller lenders

  • SlickMick on 15/07/2022 - 08:52
    +1

    I was going to go to Athena next time I refinance, but I think all the cheap lenders have the same problem. I've churned between ubank, Homestar and loans.com.au in the past, but they never stay cheapest for long.
    There's considerable expense in refinancing, so it's really a mugs game.

    • TilacVIP on 15/07/2022 - 11:41
      +1

      Sounds like those small electricity providers, that are now jacking up prices by up 100%. [The small Electricity providers, not the finance companies]

  • CodeXD on 15/07/2022 - 08:56

    I was tossing up between Athena and TicToc… will now need to see how TicToc response to RBA's raise.

  • Darayus on 15/07/2022 - 12:02
    +1

    When I bought my first home in 2007 I went with an online loan company, the cheapest in the market and frill-free.

    When the 2008-09 GFC hit they shoot up the interest rate to 12.5% from 4.5% signed originally, Due to increase in the cost of funds in the global market our interest rate has been passed on to you with the same sorry story.

    When you try to refinance, new banks are slow as they don't want new loans and they too need more documents to refinance there are exit clauses in pre-discharge cost which are not read in detail when signing original documents as they were not relevant at that time.

    Even today I am paying mortgage interest @ 6.5%, but since I almost prepay this loan by now higher interest rate is not that effective so continue to live with them.

    So always borrow from main lending banks where they dont shoot interest rates high and lock you down with unreasonable exit clauses.

    • Neoika on 15/07/2022 - 12:21

      Thanks for sharing it. I cant agree more.

    • SlickMick on 15/07/2022 - 12:42
      +2

      My experience has been that the other cheapies will source finance cheaper than yours and thus offer a better deal, but they've all been well under the big lenders.
      A cheaper lender isn't going to stay in business otherwise. They only have to be a little uncompetitive to justify a refinance.

      I don't know what you mean by new banks not wanting loans?

      I think your conclusion is way off. I'm never going to pay the premium rates and fees for the big banks.

      And exit clauses became illegal a decade or more ago. Which was a shame, because the small guys could offer a much better deal if they knew they could keep you for 5 years.

      Sounds like you had a bad experience, but going to the big banks isn't the answer IMO.

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