Newcastle Permanent Building Society has extended its partnership with Athena Home Loans, investing a further $250 million in "high quality" mortgages.

The deal is the second of its type since the two entities announced a strategic partnership a year ago through an initial $300 million deal, and follows the Perm's recent merger announcement with Greater Bank.

Under the new deal, Newcastle Permanent will supply Athena with $250 million in home loan funding for mortgages that are "high quality" (considered at low risk of defaulting due to a strict lending criteria), and that have a low "loan to value ratio", that is, the loan value to the value of the property.

Newcastle Permanent's CEO Bernadette Inglis said the partnership with Athena is part of the banking organisation's strategy to actively pursue opportunities that leverage its financial strength and grow the business.

"We are one of the largest customer owned financial institutions in Australia, with a strong financial position and unique capital strength. This puts us in a great position to seize growth and investment opportunities, like our partnership with Athena," she said. "Our purpose is to help Australians purchase homes ... Investing in these Athena sourced, high-quality mortgages complements our own home loan business and our ability to continue to deliver value to customers," she said.

Athena co-founder Michael Starkey said the partnership delivered growth and competition benefits.