Find and compare fixed rate bad credit home loans

Showing home loans based on a loan of
$
for
with a deposit of
Advertised Rate

1.84

% p.a

Fixed - 1 year

Comparison Rate*

2.01

% p.a

Company
Repayment

$1,248

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

4.43

/ 5
Go to site
More details
Advertised Rate

1.79

% p.a

Fixed - 1 year

Comparison Rate*

2.06

% p.a

Company
Repayment

$1,241

monthly

Features
Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

4.75

/ 5
Go to site
More details
Advertised Rate

1.79

% p.a

Fixed - 2 years

Comparison Rate*

2.16

% p.a

Company
Repayment

$1,241

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

4.55

/ 5
Go to site
More details
Advertised Rate

1.95

% p.a

Fixed - 3 years

Comparison Rate*

2.27

% p.a

Company
Repayment

$1,264

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.80

/ 5
Go to site
More details
Advertised Rate

2.09

% p.a

Fixed - 3 years

Comparison Rate*

2.28

% p.a

Company
Repayment

$1,285

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

4.35

/ 5
Go to site
More details
Advertised Rate

1.99

% p.a

Fixed - 2 years

Comparison Rate*

2.44

% p.a

Company
Repayment

$1,270

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

4.00

/ 5
Go to site
More details
Advertised Rate

1.99

% p.a

Fixed - 3 years

Comparison Rate*

2.59

% p.a

Company
Repayment

$1,270

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.66

/ 5
Go to site
More details
Advertised Rate

2.04

% p.a

Fixed - 2 years

Comparison Rate*

2.60

% p.a

Company
Repayment

$1,277

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

4.15

/ 5
Go to site
More details
Advertised Rate

2.09

% p.a

Fixed - 3 years

Comparison Rate*

2.60

% p.a

Company
Repayment

$1,285

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.87

/ 5
Go to site
More details
Advertised Rate

1.89

% p.a

Fixed - 2 years

Comparison Rate*

2.72

% p.a

Company
Repayment

$1,256

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.94

/ 5
Go to site
More details
Advertised Rate

2.79

% p.a

Fixed - 4 years

Comparison Rate*

2.79

% p.a

Company
Repayment

$1,390

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.61

/ 5
Go to site
More details
Advertised Rate

2.44

% p.a

Fixed - 2 years

Comparison Rate*

2.83

% p.a

Company
Repayment

$610

monthly

Features
Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.65

/ 5
Go to site
More details
Advertised Rate

1.89

% p.a

Fixed - 2 years

Comparison Rate*

2.85

% p.a

Company
Repayment

$1,256

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.60

/ 5
Go to site
More details
Advertised Rate

1.88

% p.a

Fixed - 2 years

Comparison Rate*

2.86

% p.a

Company
Repayment

$1,254

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

4.23

/ 5
Go to site
More details
Advertised Rate

2.19

% p.a

Fixed - 3 years

Comparison Rate*

3.04

% p.a

Company
Repayment

$1,299

monthly

Features
Redraw facility
Offset Account
Borrow up to 95%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.64

/ 5
Go to site
More details
Advertised Rate

2.19

% p.a

Fixed - 2 years

Comparison Rate*

3.09

% p.a

Company
Repayment

$1,299

monthly

Features
Redraw facility
Offset Account
Borrow up to 95%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.38

/ 5
Go to site
More details
Advertised Rate

2.28

% p.a

Fixed - 3 years

Comparison Rate*

3.15

% p.a

Company
Repayment

$1,313

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.50

/ 5
Go to site
More details
Advertised Rate

1.94

% p.a

Fixed - 2 years

Comparison Rate*

3.40

% p.a

Company
Repayment

$1,263

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

3.65

/ 5
Go to site
More details
Advertised Rate

1.89

% p.a

Fixed - 2 years

Comparison Rate*

3.67

% p.a

Company
Repayment

$1,256

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.99

/ 5
Go to site
More details

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Home loan lenders we compare at RateCity

Learn more about home loans

Fixed rate bad credit home loans

If you have a poor credit history you will already know that it can be very challenging to access funds from banks and other financial institutions that lend money. Unsurprisingly most lenders are wary of taking an extra risk by lending to someone who has a history of defaulting on loans or similar financial transgressions. Fixed rate bad credit home loans are designed specifically to help people who have a poor credit rating. They aim to assist you to budget more easily so you can finance purchases to refurbish or to build your own home.

Why opt for fixed rate bad credit home loans?

Fixed rate bad credit home loans have a fixed interest rate for a certain period. Sometimes these home loans have a higher rate of interest and higher annual fees than other loans due to the increased risk of lending to someone with a poor credit record. Mainstream lenders are often unwilling to lend to those with a bad credit history and in this case, you may need to turn to specialist lenders who have a more flexible approach. Lenders selling bad credit home loans offer mortgages to people who are a known credit risk.

What are the main choices for fixed rate bad credit home loans?

Besides higher fees and interest rates, you may find that the amount you can borrow is restricted by the lender, often based on the ratio of the loan amount requested to the value of your property. You are likely to need to:

  • Supply evidence of regular income as proof that you can manage your funds
  • Declare all your outstanding debts
  • Pay stamp duty and all processing fees
  • Raise a deposit equivalent to at least 20 per cent of the loan value.

 

What are the significant loan features?

Even with a less than perfect credit history you should still look for favourable loan terms including affordable repayments. Check that the frequency of repayments suits how you organise your finances and whether you will have access to an offset account or a redraw facility.

Although higher fees are to be expected you should still shop around and compare fees on a number of different bad credit home loans until you decide which is the most competitive. If possible seek out an understanding lender to help you get the best possible fixed rate and save money.

What are the rewards and risks?

The downside of the bad credit home loan is the higher fees and interest rates you will be charged. This can include higher exit fees should you wish to pay the loan off before the term ends.

The upside is the increased flexibility applied to the criteria for lending, your protection from fluctuating interest rates and your improved ability to plan your budget. In the longer term, as long as you stick to the loan agreement and make your repayments in full and on time, your credit rating will definitely benefit.

 

Frequently asked questions

What are the different types of home loan interest rates?

A home loan interest rate is used to calculate how much you’ll pay the lender, usually annually, above the amount you borrow. It’s what the lenders charge you for them lending you money and will impact the total amount you’ll pay over the life of your home loan. 

Having understood what are home loan rates in general, here are the two types you usually have with a home loan:

Fixed rates

These interest rates remain constant for a specific period and are a good option if you’re a first-time buyer or if you’re looking for a fixed monthly repayment. One possible downside of a fixed rate is that it may be higher than a variable rate. Also, you don’t benefit from any lowering of interest rates in the market. On the flip side, if rates go up, your rate won’t change, possibly saving you money.

Variable rates

With variable interest rates, the lender can change them at any time. This change can be based on economic conditions or other reasons. Changes in interest rates could be beneficial if your monthly repayment decreases but can be a problem if it increases. Variable interest rates offer several other benefits often not available with fixed rate home loans like redraw and offset facilities and free extra repayments. 

What is a fixed home loan?

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

What is a bad credit home loan?

A bad credit home loan is a mortgage for people with a low credit score. Lenders regard bad credit borrowers as riskier than ‘vanilla’ borrowers, so they tend to charge higher interest rates for bad credit home loans.

If you want a bad credit home loan, you’re more likely to get approved by a small non-bank lender than by a big four bank or another mainstream lender.

How can I get a home loan with bad credit?

If you want to get a home loan with bad credit, you need to convince a lender that your problems are behind you and that you will, indeed, be able to repay a mortgage.

One step you might want to take is to visit a mortgage broker who specialises in bad credit home loans (also known as ‘non-conforming home loans’ or ‘sub-prime home loans’). An experienced broker will know which lenders to approach, and how to plead your case with each of them.

Two points to bear in mind are:

  • Many home loan lenders don’t provide bad credit mortgages
  • Each lender has its own policies, and therefore favours different things

If you’d prefer to directly approach the lender yourself, you’re more likely to find success with smaller non-bank lenders that specialise in bad credit home loans (as opposed to bigger banks that prefer ‘vanilla’ mortgages). That’s because these smaller lenders are more likely to treat you as a unique individual rather than judge you according to a one-size-fits-all policy.

Lenders try to minimise their risk, so if you want to get a home loan with bad credit, you need to do everything you can to convince lenders that you’re safer than your credit history might suggest. If possible, provide paperwork that shows:

  • You have a secure job
  • You have a steady income
  • You’ve been reducing your debts
  • You’ve been increasing your savings

Are bad credit home loans dangerous?

Bad credit home loans can be dangerous if the borrower signs up for a loan they’ll struggle to repay. This might occur if the borrower takes out a mortgage at the limit of their financial capacity, especially if they have some combination of a low income, an insecure job and poor savings habits.

Bad credit home loans can also be dangerous if the borrower buys a home in a stagnant or falling market – because if the home has to be sold, they might be left with ‘negative equity’ (where the home is worth less than the mortgage).

That said, bad credit home loans can work out well if the borrower is able to repay the mortgage – for example, if they borrow conservatively, have a decent income, a secure job and good savings habits. Another good sign is if the borrower buys a property in a market that is likely to rise over the long term.

I have a poor credit rating. Am I still able to get a mortgage?

Some lenders still allow you to apply for a home loan if you have impaired credit. However, you may pay a slightly higher interest rate and/or higher fees. This is to help offset the higher risk that you may default on your repayments.

Can I get a home renovation loan with bad credit?

If you're looking for funds to pay for repairs or renovations to your home, but you have a low credit score, you need to carefully consider your options. If you already have a mortgage, a good starting point is to check whether you can redraw money from that. You could also consider applying for a new home loan. 

Before taking out a new loan, it’s good to note that lenders are likely to charge higher interest rates on home repair loans for bad credit customers. Alternatively, they may be willing to lend you a smaller amount than a standard loan. You may also face some challenges with getting your home renovation loan application approved. If you do run into trouble, you can speak to your lender and ask whether they would be willing to approve your application if you have a guarantor or co-signer. You should also explain the reasons behind your bad credit rating and the steps that you’re taking to improve it. 

Consulting a financial advisor or mortgage broker can help you understand your options and make the right choice.

Does the Home Loan Rate Promise apply to discounted interest rate offers, such as honeymoon rates?

No. Temporary discounts to home loan interest rates will expire after a limited time, so they aren’t valid for comparing home loans as part of the Home Loan Rate Promise.

However, if your home loan has been discounted from the lender’s standard rate on a permanent basis, you can check if we can find an even lower rate that could apply to you.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

Cash or mortgage – which is more suitable to buy an investment property?

Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.

How do I get a pre-approved home loan with Aussie?

Getting Aussie home loan pre-approval means receiving conditional support from Aussie Home Loans to borrow the money you need to buy a home. 

It’s an indication of the approximate amount Aussie may offer you, subject to some terms and conditions. Keep in mind, having a pre-approved home loan does not guarantee an actual approval of your loan when it comes time to buy.

Aussie home loan pre-approval often involves speaking to one of the lender’s brokers. You can make an appointment online. You’ll often have to submit your personal details and other information about your assets, income, liabilities and expenses.  It’s worth remembering that a pre-approved loan is usually valid for a few months.

Can I get a NAB first home loan?

The First Home Loan Deposit Scheme of NAB helps first home buyers purchase a property sooner by reducing the upfront costs required. This scheme is offered based on a Government-backed initiative, with10,000 available places announced in October 2020.

Suppose your application for the NAB first home buyer loan is successful. In that case, you’ll only need to pay a low deposit, between 5 and 20 per cent of the property value and won’t be asked to pay lender's mortgage insurance (LMI). You’ll also receive a limited guarantee from the Australian government to purchase the property.

If you’re applying for the NAB first home buyer home loan as an individual, you need to have earned less than $125,000 in the last financial year. Couples applying for the NAB first home loan need to have earned less than $200,000 to be eligible. To be considered a couple, you need to be married or in a de facto relationship. A parent and child, siblings or friends are not considered a couple when applying for a NAB first home loan.

The NAB First Home Loan Deposit Scheme is currently offered only to purchase a brand new property, rather than an established property.

Where can I get all the information about an ANZ first home buyer’s loan?

As a first home buyer, you may require help and hand-holding, and as such ANZ has the buying your first home section on its website full of important information. ANZ also has a form in this section you can fill out to get a free consultation from an ANZ First Home Coach and create your own plan for buying your first home. This coach will help you understand where your current income is being spent and plan for your home loan repayments. You’ll get a clear picture of the costs involved in purchasing a property and how to budget or save for these costs. The coach will help you understand different deposit options and manage your accounts to enhance your savings.

There are three types of ANZ first home loans - Standard Variable, Fixed, and Equity Manager. The features, interest rates, and terms for each are different, and you can compare them here.

When they apply for an ANZ home loan, first home buyers can also get guidance on applying for the First Home Owner Grant (FHOG). This is a one-off government grant that may be available to you when you’re buying your first home. The eligibility criteria for FHOG differs between the different states and territories, which is why it’s helpful to have expert advice when applying.

How does RateCity make money?

For details on how RateCity makes money, please see here.

Am I guaranteed to be approved for all the loans I’m shown?

No. While we will do our best to show a list of loans that may suit your needs, if you choose to apply to refinance, it is up to the lender to approve or disapprove your loan based on your individual circumstances, after you have submitted all your paperwork.

This can sometimes take up to 30 days, so it is important to find out exactly what the criteria is for the loan, and what you need in terms of paperwork. RateCity does not make any suggestions taking into account your personal and individual needs.

How do you calculate how much you could save with a lower rate?

To work out how much you could save, we run the home loan details you’ve provided through our database, and search for similar home loan options that we think would be suitable for you.

We then calculate the costs of these loan options over 15 years (to keep our calculations consistent) and compare them to the cost calculations for your current home loan.

What happens if I don’t know my monthly repayments?

Your repayments should appear on your bank statements or your internet banking. If you make weekly or fortnightly repayments, make sure you convert them to monthly calculations.