Up Home offers alternative to big banks

Up Home offers alternative to big banks

Australian household budgets are under pressure, but fewer big banks are willing to compete for business from first home buyers and refinancers, who may instead start comparing options from alternative lenders, such as app-based digital banks.

Figures from the Australian Bureau of Statistics (ABS) show that refinancing is still strong, with borrowers switching lenders in response to rising interest rates. But while earlier in the year dozens of banks were offering cashback deals to attract business from these customers, today about a third of those offers are still available.

However, more digital mortgage lenders are coming forward to compete with traditional lenders. As these online lenders don’t need to maintain branch networks, they can focus on providing competitive home loan deals and innovative technologies to help you manage your household budget.

For example, digital bank Up offers fixed and variable home loans with competitive interest rates, and the option to buy with a 10% deposit (though you’d also need to budget for LMI). Extra repayments, free redraws, and 100% full offset accounts are also available to offer extra flexibility around managing your mortgage payments.

Like its other financial products, Up’s home loans are accessed via its smartphone app, putting your finances literally in the palm of your hand. This can help you track the progress of your loan and manage your repayments.

If you’re uncertain about taking your banking fully digital, keep in mind that Up is backed by Bendigo & Adelaide Bank, so it can focus on looking after its customers and innovating its financial offers.

While Up Home was just for refinancers when it first launched in 2022, today anyone can get a home loan on their phone through Up. First home buyers may be able to benefit from Up’s Home Deposit Saver account, which lets you set a savings goal and track your progress towards it over time. This may be supported by Up’s Round Ups feature that can put a few extra cents aside from each purchase you make, so you can move closer to your savings target without even realising it.

When the time comes to apply, Up can use its Home Zone tool to automatically pull in data from your Spending Insights in-app. This can quickly give you a better idea of how much you could afford to borrow, and hopefully speed up the home loan approval process, all managed via the Up app.  

Of course, it’s essential to compare all of your available home loan options and consider which one may best suit your financial situation before switching loans or applying for your first home loan. 

For example, as well as Up, other alternative lenders you could consider include Tic:Toc and Unloan. Refinancers looking to access equity from their property could also consider a Midkey home loan.

Be sure to look at the interest rates, fees, features, benefits and more to get a better idea of the value each loan could offer you and which one may best suit your needs.

Product database updated 11 Dec, 2023
Fact Checked

This article was reviewed by Personal Finance Editor Peter Terlato before it was published as part of RateCity's Fact Check process.