Who is Nano Home Loans?
Nano emerged in 2019 after co-founders Andrew Walker and Chris Lumby left the big banks to reshape financial services of the past with technology of the future.
A year on, we are a growing team of nearly 70 staff. Our refinance home loan rewards the best customers and is our first product. Nano is well-funded having raised $33M in April 2020, giving us plenty of runway to change financial services for the better.
Is Nano a bank?
Nano is not a bank. Nano has an Australian Credit Licence (ACL) 511406, meaning we can provide lending products. We specialise in home loans.
This differs from the way a bank is set up as they are licensed as an Authorised Deposit taking Institution (ADI) and regulated by APRA. We’re both regulated by ASIC.
Nano is not covered by the government’s financial claims scheme which protects deposits up to a limit with ADIs.
What makes Nano different?
Nano is reshaping financial services of the past with technology of the future. We’re achieving this through our fully digital home-lending products.
We use automated property valuations, digital credit scores, automatic retrieval of banking transaction data, and digital verification of identity using biometrics in the home loan application process. With this use of data, we can approve your home loan in minutes (not weeks!) by removing the need for paper-based forms and manual intervention. We’ve designed our business this way to take the effort and ambiguity out of the process for you.
Then there is our home loan that offers you one place to borrow, purchase, pay and tuck money away, all fee free. Yes, that’s right, there are no fees charged by Nano with any of our loans.
Will you offer other products than just home loans?
Initially we will be offering Nano home loans. Over time, we will expand our offering to other areas where we can make a real difference to our customers.
Where does Nano get the money to provide the loans?
As a non-bank lender, Nano uses money from wholesale funding markets to fund our loans. Along with being completely digital with a lower cost base, this is how we are able to offer you such competitive rates (and with zero fees!).
What comfort do I have that Nano will be around in the years to come?
Nano is well-funded, having raised $33m in April 2020, giving us plenty of runway to change financial services for the better. We are led by an experienced leadership team (collectively with 150 years’ experience in financial services and technology). We are partnering with some of the biggest technology and financial services providers in Australia and globally to bring to life our vision. We know this is not an overnight success story and our leadership team alongside our partners are ready for the journey.
How is your offset sub account treated from a tax perspective?
The tax treatment of offset sub-accounts is covered in a tax ruling which can be located here. One potential benefit of an offset account is that the interest that a customer saves by using an offset account will not be taxed. Please speak to your tax adviser for advice on your home loan.
How to calculate home loan repayments
Home loan repayments are calculated based on a range of factors including the loan amount, interest rate, loan term and repayment type.
How can I make my loan repayments
Your Nano home loan requires you to make a contractual repayment every month. We do not currently demand a direct debit to take this from another account. Instead, we give you flexibility and take the repayment from your Nano offset sub account. So, as long as you have enough funds in your offset sub account on your repayment date, your repayment will go through successfully.
There are a few ways to get funds into your offset sub account; 1) Make an instant payment in from another eligible account, 2) Set up a recurring payment from another eligible account of your choice, 3) Have your salary credited to your Nano Offset sub account.
You can choose whichever option best suits you, just make sure there are enough funds in your offset sub account on the date of your repayment. And remember, every dollar in your offset sub account reduces the interest you pay. That’s the Nano way to pay.
What is an interest only home loan
Interest only home loans allow you to only pay the interest on your loan, without contributing any money towards paying off the principal. This is as opposed to principal and interest loans, where a portion of your repayments goes towards paying the interest, and a portion towards the principal component of your loan, reducing your loan limit over time. Most interest only loans have a maximum amount of time you can make interest only repayments (at Nano, between 1 -5 years), before switching back to principal and interest repayments.
There are a number of reasons why you might want to get an interest only loan including improving your cashflow and potential tax benefits. However, an important thing to consider before deciding whether to choose an interest only loan, is that although at first the repayments may look more affordable, you want to make sure you can afford the repayments once they revert back after the interest only term has finished (which will often be higher than if you chose to pay principal and interest repayments from the beginning, as you will be condensing paying off the loan into a shorter term).
How to pay off your home loan faster
You can pay off your home loan faster by depositing additional funds into your offset sub account, or by shopping around for a better deal. You’ll be happy to know that Nano has some of the most competitive home loan interest rates and one of the most flexible offset sub account facilities in the Australian market – our home loan product is essentially designed to maximize the money you save and pay down your loan as quick as possible!
How is home loan interest calculated?
At Nano, home loan interest is calculated daily, and posted monthly by multiplying the outstanding loan balance by the Annual Percentage Rate (APR) (converted into a daily percentage). Calculate how much interest you could save by switching over to Nano
What are Nano’s home loan interest rates?
You can find our current home loan interest rates here.
How much deposit do I need for a Nano home loan?
At Nano, you need to have a Loan-to-Value ratio (LVR) under 75%, meaning you need at least a 25% equity.
Which home loan is best for me?
At Nano, we have an all-in-one home loan product to suit your needs. Initially, we are allowing customers to refinance existing loans held at other financial institutions (home loans for newly purchased properties will be introduced in coming months).
Our all-in-one home loan has a range of options which cater for owner occupied or investment property loans, and principal & interest or interest only repayment options.
We also have one of the most flexible offset sub account facilities in the Australian market, which reduces the interest charged on your loan. All Nano home loans can be managed on the Nano App which gives you instant access to your funds, transaction capability and will be linked to a Nano Visa card where you can make local and international transactions (including withdrawals at an ATM). All of course with no Nano fees.
How to apply
Ready to make a smart money move? Refinance now
How to be approved
Once we launch, all you will need to do is apply online via our market-leading digital application process. It’s as simple as that!
We’ve designed a seamless home loan application process using automated property valuations, digital credit scores, automatic retrieval of banking transaction data, and digital verification of identity using biometrics, thereby removing the need for paper-based forms, manual intervention and long delays.
How to qualify for a home loan
To qualify for a home loan with Nano, initially you’ll need to have a minimum household income of $100,000 as well as a maximum LVR of 75%
How much can I borrow?
Currently, Nano has a minimum loan amount of $100,000 and a maximum loan amount of $2,500,000. However, the total amount you can borrow will vary depending on your personal financial situation.
What fees are associated with a Nano home loan?
When you refinance to Nano, you will not be charged a Nano fee. No application, monthly or annual fees. No offset, valuation or settlement fees. No Nano discharge fee. Simply no Nano fees. $0. Simple, right?
That being said – there are other third party Government refinance costs of around $260-$440. These vary by state, but include title registration, discharge of mortgage, and title search fees. In some instances, Stamp Duty may also apply (usually only when transferring property into a new name). Be sure to check the relevant Government websites for the latest rates that apply to you.
Your current lender may also charge you an exit or discharge fee when refinancing. Be sure to check this via your contract and T&C’s or, if necessary, directly with your current lender, especially if you are on a fixed rate and break fees may apply. We want to ensure making the switch to Nano is going to put you in a better position (which we are confident it will).
Nano Visa debit card usage fees
Once you become a Nano customer (we can’t wait to welcome you) and start using your Nano Visa debit card, Nano does not charge any fees for you to transact here or overseas. We also use Visa’s spot exchange rate for all overseas transactions – so you get the best available rate with no added margin or spread.
Also, Nano do not charge any fees on ATM withdrawals here or overseas. However, it’s worth noting that some ATM providers will charge third-party fees that are outside Nano’s control, so make sure you are comfortable with the cost of your withdrawal before you accept.
What are your interest rates?
Our current interest rate can be found here.
There are currently some great honeymoon and cashback offers in the market – how do these compare with Nano?
A lot of lenders promote attractive honeymoon or introductory rates to bring customers in, then roll the loan onto higher interest rates after the honeymoon period has concluded.
For the true cost of a loan, you should look at the comparison rate, which includes the interest rate the loan will revert to after the honeymoon period has ended, as well as any other fees and charges.
At Nano, we believe in honesty and clarity – which is why we don’t use fancy honeymoon rates or cashback offers to allure our customers. Nano’s comparison rates are the exact same as our interest rates, because we have zero fees and charges – what you see is what you get! And you’ll be happy to know that Nano has amongst the lowest comparison rates in the Australian market.
If interested, we have provided some working examples to demonstrate the “true cost” of home loans with honeymoon rates or cashback offers below.
Example 1: Honeymoon rate
- Another lender is offering a 1 year honeymoon rate at 1.99% p.a.
- A customer signs up, thinking it’s an attractive rate, refinancing their $150,000 loan to the lender on a 25 year total loan term
- The loan will roll onto a rate of 2.50% p.a. after the honeymoon period ends
- Assuming no other fees or charges, the customer’s “true” interest rate over the entire loan term (or comparison rate) is actually 2.46% p.a.
Example 2: Cashback offer
- A lender is offering a $3,000 cashback for customers who refinance their with loan them. The loan is charging a 2.80% p.a. interest rate
- Attracted by the cashback offer, the customer signs up, refinancing their $150,000 loan to the lender on a 25 year total loan term
- The cashback of $3,000 is roughly equivalent to a 0.14% saving over the life of the loan, meaning the “true” interest rate the customer pays over the entire loan term (or comparison rate) is approximately 2.66% p.a. For larger loans, the equivalent savings would be even less.
Banks are currently offering cheap fixed rates. Should I get a fixed or variable loan?
Fixed and variable rate home loans cater to different needs, so you should assess which is better suited to you.
A fixed rate loan has the same interest rate for an agreed period, whereas variable rate loans have an interest rate that changes over time. This means if interest rates decline, you could benefit from having a variable rate loan. Whereas, if interest rates go up, you could benefit from having a fixed rate. However, it is always difficult to predict which way the market will go.
Fixed rate loans can include upfront and ongoing fees & charges, limits placed on how much you can pay off the loan over the fixed period, as well as heavy penalties if you “break” the fixed loan contract (e.g. if you want to redraw funds, or refinance the loan to another provider). So it is important to do you research and understand the full picture.
Sometimes customers will split their loan to be partially fixed, and partially variable, to realise some of the benefits of both. However, to do this, they must have both portions of the loan with the same mortgage provider.
But an important thing to note is that the true cost of a loan is in the comparison rate, which reflects the true cost of the loan, including fees and charges.
Nano currently only offers a variable rate home loan, but you’ll be happy to know that we have amongst the lowest comparison rates in the Australian market.
We have provided an example below to show how the “true cost” of a fixed home loan is calculated.
Example: A 2 year fixed rate loan
- Another lender is offering a 2 year fixed rate home loan at a very competitive 2.00% p.a.
- A customer signs up, thinking it’s an attractive rate, refinancing their $150,000 loan to the lender on a 25 year total loan term
- The loan will roll onto a rate of 3.00% p.a. after the fixed rate period ends
- Assuming no other fees or charges (usually not the case with fixed loans), the customer’s “true” interest rate over the entire loan term (or comparison rate) is actually 2.83% p.a. Much higher than the originally advertised fixed rate of 2.00% p.a.
What is a comparison rate? Why is your comparison rate the same as your interest rate, whereas with other lenders it is different?
A comparison rate is designed to represent a closer estimate of the true cost of a loan. It is expressed as an annual percentage rate and includes the loan’s interest rate as well as most upfront and ongoing fees and charges.
Lenders are legally required to show customers a comparison rate if they advertise a product’s interest rate, to help you identify the cost of the loan more accurately and make it easier to compare products.
A lot of lenders include attractive “headline” interest rates to allure customers, but then hide other ugly fees and charges or roll-to-rates that you’ll pay, disguising the “true cost” of your loan. This is why comparison rates of other lenders are often much higher than their advertised interest rate.
At Nano, we believe in transparency, and charge zero fees, which is why our comparison rates for our principal and interest home loans are the exact same as our interest rates – what you see is what you get! And you’ll be happy to know that Nano has amongst the lowest comparison rates in the Australian market.
Privacy & security
How will I know my personal information is secure with Nano?
We take data security and the protection of personal information extremely seriously. We have processes and systems in place to protect your personal information, including:
- 256-bit data encryption, the same level as banks. We use this across all sensitive information where required;
- System controls that ensure access to personal customer information is strictly limited to staff requiring it for their daily activities;
- Privacy and cyber security training for all staff.
We also comply with and take our legal and regulatory obligations including the Privacy Act and the Credit Reporting Code very seriously. You can find more information regarding the collection, storing and use of your personal information in the Nano Privacy Statement & Policy.
The application process requires me to provide my banking details. Is this safe? How does Nano ensure my banking data is protected?
As a financial technology company, we aim to use data at every opportunity to deliver a great experience. To assess your loan application, we need to complete a digital review of your banking and loan data.
The process we use to do this is proven, safe and secure. We take data security and the protection of sensitive information extremely seriously. We have the following protocols in place:
- One time use only: We never see or store your banking username or password.
- Read-only data: Your transaction history and account details are read-only – it’s impossible for us to transfer or transact with any of your accounts.
- Maximum security: We use 256-bit encryption with all information (the same as big banks).
- Secure storage: All data is securely stored, and we only use it in accordance with our Privacy Statement & Policy.
In fact, the information that we digitally assess is similar to what you would supply if you were to manually provide your bank statements to us. We just take the hassle out of the process for you.
How to access your statements in the Nano app?
Your statements will be generated every 6 months and can be accessed from your Nano app.
To access simply:
- Log into the Nano app and click on the blue arrow under your property address
- Scroll to the menu at the bottom of the screen
- Select ‘View statements’
- Select your statement to view and download
(Note: Please make sure you have the latest version of the app).
How to set up a ‘Vault’ in the Nano app?
Create a vault to tuck money away towards a specific goal, all while offsetting the interest charged on your loan. You can create and transfer funds to and from your vault at anytime. To set up:
- Login to the Nano app
- From the dashboard, select ‘Vaults’ under offset sub account.
- Follow the steps to create a vault
Do I get an offset account with my home loan?
Your Nano home loan comes with a free 100% offset sub account linked to your home loan.
Every dollar in your offset sub account reduces the interest you pay. Make real time BSB & account transfers or pay using your Nano Visa debit card, Apple Pay and Google Pay. And best of all, there are no monthly or yearly account fees.
What is the difference between a traditional offset account and Nano’s offset sub account?
Both offset accounts and offset sub accounts reduce the interest charged on the loan by “offsetting” the outstanding loan balance by the amount stored in the account.
The main difference is that a traditional offset account is a separate deposit account that can be connected to a home loan with its own stand-alone BSB and account number. A traditional offset account can only be offered by an Authorised Deposit taking Institution (or ADI, such as a bank), and the funds deposited in them forms part of the government’s Financial Claims Scheme, which guarantees funds of up to $250,000. You can get 100% offset accounts or sometimes providers apply a partial offset percentage, and the accounts usually have transactional capability.
Nano’s offset sub account operates in a similar way, however there are some differences.
First, the offset sub account sits within the customer’s home loan account, meaning that it does not have a separate, stand-alone account number. As the offset sub-account is not a stand-alone account, the funds can only ever be used to offset the loan account. The funds are not deposit funds.
Second, since Nano is not an ADI, such as a bank, we do not form part of the government’s Financial Claims Scheme. However, at Nano, any funds in our offset sub account still offset 100% of the interest charged on the loan.
For example, if you have a home loan balance of $500,000 and $20,000 is paid into your Nano offset sub account and not withdrawn for that month, you will be charged interest only on the balance of $480,000 that month.
Do I get a card with my account?
Yes. When your loan settles and you register for the Nano app, you will be signing up for your Nano Visa debit card, which you can use to transact from the offset sub account feature of your home loan wherever Visa cards are accepted.
Will my Nano Visa card incur any ATM fees?
Nano customers can withdraw cash from ATMs. There are no Nano fees. However, customers may be charged fees by other financial institutions or ATM providers when using some ATMs, which is outside of Nano’s control. The Big 4 Bank owned ATMs should be fee-free.
Please note, merchants do not accept the Nano Visa debit card for any cash out options in stores – so if you require cash, an ATM is the only option.
Can I use my Nano Visa card overseas?
Yes, you can. Spend like a local wherever you go. Your Nano Visa debit card is accepted anywhere overseas that Visa cards are accepted as a payment method. It also comes with the following great features:
- $0 Foreign Exchange fees with Visa exchange rate.
- $0 international transaction fees in-store or online.
- Nano will not charge any fees for international ATM withdrawals (however third-party fees may apply)
What if I have multiple loans secured by the same property? Will I be eligible to be a Nano customer?
This is known as a split loan. We will not initially be offering split loans secured against the same property. This feature will come sometime in the near future.
Can I top up my loan if I need more funds in the future?
Initially we will not be allowing top ups to existing loans. This feature will come sometime in the near future.
My partner is Self Employed – do we qualify?
As long as both parties on the loan have combined household income of $100,000 or over, yes, you can proceed with the application. We may ask your partner some additional and different questions to satisfy our responsible lending requirements.
Is there a minimum loan amount?
Yes – the minimum loan amount is $100,000.
Is there a maximum loan amount?
Yes – the maximum loan amount is $2,500,000.
I have a partner listed on my existing home loan. Can I open a loan account in both our names?
Yes, you can. Joint home loans are part of our initial offering.
Do you have savings accounts?
As we are not licensed as an Authorised Deposit Taking Institution (ADI), we cannot offer standalone savings or deposit accounts. However, through our innovative offset sub account feature of our home loan, the funds you put in automatically reduce the interest charged on your loan.
The reduction in interest is more than you would typically earn in a savings account, and you don’t have to pay tax on it. We also allow you to transact and make instant payments with your funds using your Nano Visa card, and via the New Payments Platform (NPP).
We also offer customers the ability to set up “Vaults” with their offset sub account. This helps you tuck away your extra funds for those things that are important to you whilst still reducing the interest charged on your loan.
Will you be offering new loans or just refinancing?
Initially, we will be allowing customers to refinance existing loans held at other financial institutions. We will be looking to introduce loans for new home purchases sometime in the future, as well expanding our eligibility criteria to a number of other areas as well.
What is the cost of switching from my current lender to Nano?
Nano is unable to say exactly how much it will cost you to switch from your existing lender to us, so we recommend you check your existing financial institution’s T&Cs or contact them to be certain.
What is refinancing?
Refinancing is essentially taking out another loan to pay off an existing loan, which could be held at another financial institution.
What’s the difference between refinancing and a home equity loan?
A home equity loan uses the existing equity in your property as collateral for a separate new loan, whereas refinancing is simply replacing your existing loan with a new loan. When refinancing with Nano, we also let you access some of the existing equity in your property via our “equity release” feature, which is up to $100k in additional funds (or 75% of the property value).
How much equity do you need to refinance?
At Nano, you’ll need to have a maximum Loan-to-Value Ratio (LVR) of 75%, meaning you’ll need to have at least 25% equity in your existing property (or the equivalent in available funds which you can deposit into your loan before refinancing).
How long does refinancing take?
The process varies lender to lender, however at Nano, you can get your home loan approved in minutes (not weeks!) due to our market-leading digital application and decision making process. Once approved, the settlement process is set by your current lender which takes around 2-3 weeks, but can take longer. However, we’ll make sure to stay in touch and clearly communicate with you throughout the process, keeping you updated with progress and next steps – all the way from the start of the application, right through to becoming a Nano customer.
How frequently can you refinance?
You can refinance as often as you like. You should first check if your current lender has any exit fees or break costs (especially if you have a fixed rate loan). However, if you can get a better deal than you are currently on, it could end up saving you thousands of dollars over the life of the loan.
Is refinancing worth it?
Often people think that refinancing is more hassle than it’s worth. This is a result of out-dated, manual and slow systems that traditional lenders use to process home loan applications resulting in customers waiting weeks (or months) to refinance. Then on top of this, there are vast amounts of paperwork you need to provide. At Nano, we’ve built our digital home loan experience to take all of the time, pain and hassle out of refinancing, making it easier for you to consider the true value of making a change.
Refinancing also depends on what your needs are, but there are a number of reasons why you may consider it. You should assess whether your current lender and loan is adequately meeting your needs, and if they could be better met by somebody else. But it’s always good to shop around – a better deal could end up saving you thousands of dollars over the life of the loan!
Find out how much you could save by refinancing with Nano. View our calculator.
How to refinance a home loan
You’ll first need some basic information on your current situation such as a rough estimate of your loan amount, your loan type, and current interest rate so that you can compare loans. After this, you can start shopping around.
Once you find a suitable lender (which we hope is Nano), you need to make sure the amount you are asking to borrow will cover the loan (or loans) you are refinancing (including any break or exit fees and interest outstanding).
After this, you can apply for the new loan. Once approved, the new lender will issue you contracts and organise settlement and transfer of the mortgage. And voila! You can enjoy your new home loan!
At Nano, we make the refinance process as easy and as fast as possible via our market-leading digital application process, where you could be approved in minutes, not weeks. We use automated property valuations, digital credit scores, automatic retrieval of banking transaction data, and digital verification of your identity using biometrics, removing the need for paper-based forms, manual intervention and long waiting times.
What happens if Nano ceases to operate?
This is extremely unlikely to happen however we understand why you’re interested in asking this question.
If we closed our doors, your loan would need to be serviced by another lender and we would assist you with this change over.
Nano is well-funded having secured $33m in Series A funding giving us plenty of runway to operate and change home loans for the better.
I’m having an issue with the application. What do I do?
You can contact us and one of our helpful customer support team will be able to guide you through the process and help answer any questions you may have.