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The REA Group has agreed to acquire a 19.9 per cent interest in non-bank lender Athena Home Loans.
The group – which is also the parent company of major brokerage Mortgage Choice – already has a white label product range with the lender, Mortgage Choice Freedom.
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REA is now setting aside up to $62 million for the transaction to buy around a fifth of the lender (to be funded from the group’s existing cash reserves).
The proposed investment is subject to certain conditions, including regulatory approval, and is expected to be completed in one to two months. Once completed, REA will take two seats on Athena’s board.
Speaking of the deal, REA Group CEO Owen Wilson, said the company continues to invest in new technology to accelerate its strategy and deliver “greater value” to consumers, customers, Mortgage Choice brokers, and shareholders.
“REA’s proposed investment in Athena will further enhance our existing partnership and reinforces our commitment to providing Australian home buyers with greater choice and a seamless consumer experience when finding and financing property,” he said.
“Growing our national broker network and evolving our digital mortgage offering for the 12 million Australians who now visit realestate.com.au is an important part of our financial services strategy.
“An equity investment builds on the success of our innovative Mortgage Choice Freedom home loan products and forms a strong alliance to support the delivery of our strategy, while also benefiting from Athena’s growing loan portfolio.”
Nathan Walsh, the co-founder and CEO of Athena Home Loans, said: “Athena is on an exciting growth trajectory and we’re thrilled to have the support of a culturally-aligned company like REA, building on the proven success of our partnership to date. REA joins a strong list of Athena investors, and we are proud to be working with this industry leader to continue our mission of changing home loans for good for all Australians.”
Other Athena investors include venture capitalists (such as Square Peg, Airtree, and Apex); super funds (Hostplus, AustralianSuper, and Australian Retirement Trust); Macquarie; and Salesforce Ventures.
The REA investment comes as Athena priced its second Residential Mortgage Backed Securities (RMBS) transaction under its Olympus program. The issuance, priced on Thursday (26 September), raised an additional $1 billion in debt funding for the lender, which it said would help drive the next phase of growth through strategic broker partnerships.
Walsh said: “We are here to support broker growth, and we are funding fit to realise this at rapid scale.
“Athena is a certified B-Corp, founded with a mission to change home loans for good. That starts with understanding the critical role of brokers and valuing the expertise they bring – a set of professionals who help Aussie families navigate one of the biggest and most complex financial decisions many will ever make. Harnessing our broker partners’ collective experience enables Athena to co-create market-leading products and best-in-class digital experiences to benefit brokers and their customers.”
Co-founder and chief operating officer Michael Starkey said: “At both a customer and a market level, we have focused on building a business with a reputation for transparency, fairness and integrity. This approach is resonating with customers and brokers. We have settled more than $8B in home loans to date and we are supported by the country’s leading investors. We are excited about the next phase.”
What does Athena offer in broker channel?
While Athena launched as a direct-to-consumer digital lender that aims to help borrowers avoid ‘loyalty tax’ and pay down their debt faster, the non-bank has been extending into the broker channel over the past few years.
In 2023, it partnered with Mortgage Choice to launch its new suite of Mortgage Choice Freedom loans (which has now settled more than $1 billion) and appointed a head of distribution to prepare for its acceleration in broker distribution.
The lender announced earlier this year that it had launched a suite of products that aims to support a range of borrowers, including those who are self-employed (via its Self Employed Lite Doc and 80–85 per cent, no lenders mortgage insurance [LMI] products).
Both products were launched via the lender’s aggregator partnerships with LMG (as part of a former partnership with FAST, now part of LMG) and Mortgage Choice, before they become available through Athena’s direct channel and Mortgage Choice Freedom direct (on realestate.com.au) later this year.
It is also now developing a set of digital products for broker clients that provide borrowers with “a fairer, faster and more favourable experience”. To determine what brokers would like to see built into the mortgage product suite, it is currently undertaking a series of co-creation workshops with LMG brokers nationwide to “harness the brokers’ collective expertise and combine it with Athena’s cutting-edge technology”.
The lender is expected to release a Non-natural Persons and Trusts product to market in due course.
[Related: In Focus: Helping Australian borrowers manage the cost of living]
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