Non-bank lender Athena has revamped its home loans to now offer two distinct product lines - Straight Up and Power Up.

The Straight Up line is a no-frills variable-rate home loan with limited features yet zero fees and a fee-free redraw facility.

For owner occupiers with up to 80% LVR the rate is 5.14% p.a. (5.09% p.a. comparison rate*).

The Power Up line comes with more features, including the ability to split the home loan between fixed and variable rates, and an offset account.

For owner occupiers with 80% LVR the rate is 5.29% p.a. (5.24% p.a. comparison rate*).

The comparison rates are lower because Athena uses a waterfall pricing structure where customers automatically get placed on a lower rate as they pay down their home loan.

For example, the Straight Up pricing tier with up to 70% LVR is 5.09% p.a. (5.05% p.a. comparison rate*)

Despite challenging market conditions, Athena has maintained its 'No loyalty tax' stance with existing customers on the same rate as new customers.

That said, this comes after Athena increased variable rates by 25 basis points last week.

Users on Twitter have also reported Athena has baked-in a 10 basis point hike to home loans that keep an offset account with the new product line.

Athena faced scrutiny earlier in 2022 for increasing variable-rate mortgages by more than the RBA's cash rate movements.

Because it's a non-bank, it has to rely on funding sources other than deposits, which in 2022 have been expensive.

One source of funding is through residential mortgage-backed securities (RMBS), which pay interest rates on top of the benchmark rate (one month BBSW) secured by pools of mortgages.

In the latter half of 2022, even the safest tranches of RMBS were commanding interest rates of 170 to 190 basis points above BBSW, bringing the rates to a total of more than 4.00%.