Competitive Home Loan Rates with Non-Bank Lenders
Looking for an alternative to the big banks? Compare some of Australia's lowest interest rate home loans with non-bank lenders.
Smart Booster Home Loan Discounted Variable - 1yr
special1.99% variable rate for 12 months then 2.48% variable rate
Interest rates ranked in the best 20%
No ongoing fees
based on $300,000 loan amount for 25 years at 1.99%
p.a Intro 12 months
Borrow up to 80%
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The 12-month interest rate discount could give you more breathing room in your household budget, or make a head start on paying off your home sooner.
Winner of Best refinance home loan, Best variable, RateCity Gold Awards 2021
p.a Fixed - 2 years
Borrow up to 80%
Homeowners may lock in a competitive interest rate for two years and enjoy access to features like a 100% offset account.
Borrow up to 60%
Borrow up to 70%
Borrow up to 60%
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Home loans from non-bank lenders
In the 1980s the banking sector in Australia was deregulated. Prior to this you could only get home loans from banks, building societies and credit unions. As a result it was difficult for Australians with a poor credit history and those on a low income to buy a home. After deregulation a number of non-bank lenders were able to start offering home loans at very competitive interest rates, often below those made available by the regular financial institutions. Homebuyers began to benefit from this competitive market as the banks were forced to lower their rates.
What are non-bank lenders?
Non-bank lenders include insurance companies, investment banks, mortgage brokers and mortgage originators among others. While they don’t hold a banking licence as such, nevertheless they are subject to the same banking regulations and laws as licensed financial institutions according to the Consumer Credit Code and the Australian Securities and Investments Commission (ASIC). ASIC requires all lenders to disclose all rates and fees pertaining to their products and to make this information easily available to consumers. The Australian Prudential Regulatory Authority (APRA) operates slightly differently in that it oversees banks for the sole purpose of ensuring that they keep to any financial promises they make.
How do non-bank lenders operate?
As privately owned non-mutual organisations, non-bank lenders usually rely on selling on their products in large quantities to be retailed by others. Compared to banks their services are restricted, however, they do include provision of bad credit loans, home loans, reverse mortgages, low doc loans and line of credit loans. Unlike regular banks, there are no additional features such as transaction accounts or credit cards.
Why opt for home loans from non-bank lenders?
Non-bank lenders provide some advantages if you are searching for a good deal as your provider can be more flexible in terms of the fees and the interest rates they charge. This results in banks lowering rates to remain competitive and you, the consumer, benefit by sourcing more affordable home loans from a variety of financial institutions.
When comparing home loans use the same criteria for non-bank lenders as for any other lender. Check your eligibility, the fees involved, the interest rates and whether the loan features are a good fit for your financial needs.
What are the rewards and risks?
Home loans from non-bankers provide a reward for customers in that they offer flexible interest rates and great levels of service. They have become enormously popular because of this, and also because some people are dissatisfied with their experiences of banks. Non-bank lenders are conscious of the fact that many dissatisfied consumers often turn to them for an improved customer service.
One thing to be aware of if you are considering home loans from non-bank lenders is that there may be inconsistencies when it comes to passing on interest rate changes. As they have a mix of private funding and funding via banks, for example if they are managing mortgages, the rate changes could vary considerably.
Property Personal Finance Writer
A property and personal finance writer, Nick Bendel covers property, loans, credit cards, superannuation, and other bank products. Nick has previously written for The Adviser, Mortgage Business, Lifehacker, Business Insider, Yahoo Finance, and InvestorDaily, and loves getting elbow-deep in the latest ABS, APRA and RBA data.
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Frequently asked questions
How to apply for a pre-approval home loan from Bendigo Bank?
Applying for pre-approval on your home loan gives you confidence in your ability to secure finance while looking at potential new homes. You can get a free and personalised pre-approval home loan from Bendigo Bank in just a few minutes, without any credit checks or paperwork.
Bendigo Bank offers pre-approval for home loans that allow you to understand the home loan size you may be able to get before looking for a new home.
With the pre-approval, Bendigo Bank provides an estimate of your borrowing power. This figure incorporates stamp duty, lenders mortgage insurance (LMI) and any first home buyer incentives you may be eligible for. You may also qualify for the First Home Loan Deposit Scheme initiative, depending on your circumstances.
To apply for a pre-approval on your home loan from Bendigo Bank, all you need to do is fill in a smart form. You could also contact the bank directly on 1300 236 344.
How much deposit do I need for a home loan from ANZ?
Like other mortgage lenders, ANZ often prefers a home loan deposit of 20 per cent or more of the property value when you’re applying for a home loan. It may be possible to get a home loan with a smaller deposit of 10 per cent or even 5 per cent, but there are a few reasons to consider saving a larger deposit if possible:
- A larger deposit tells a lender that you’re a great saver, which could help increase the chances of your home loan application getting approved.
- The more money you pay as a deposit, the less you’ll have to borrow in your home loan. This could mean paying off your loan sooner, and being charged less total interest.
- If your deposit is less than 20 per cent of the property value, you might incur additional costs, such as Lenders Mortgage Insurance (LMI).
How much deposit do I need for a home loan from NAB?
The right deposit size to get a home loan with an Australian lender will depend on the lender’s eligibility criteria and the value of your property.
Generally, lenders look favourably on applicants who save up a 20 per cent deposit for their property This also means applicants do not have to pay Lenders Mortgage Insurance (LMI). However, you may still be able to obtain a mortgage with a 10 - 15 per cent deposit.
Keep in mind that NAB is one of the participating lenders for the First Home Loan Deposit Scheme, which allows eligible borrowers to buy a property with as low as a 5 per cent deposit without paying the LMI. The Federal Government guarantees up to 15 per cent of the deposit to help first-timers to become homeowners.
Can I salary sacrifice my home loan?
You can pay for your home loan straight from your pre-tax salary by salary sacrificing. Of course, this will depend on your employer’s policy.
Salary sacrifice for home loans is offered exclusively for owner-occupied properties, so it cannot be used for investments.
Your employer may need to pay Fringe Benefits Tax (FBT), but non-profit organisations are exempt from this tax up to a certain limit. Some organisations may charge you an administrative fee to set this up.
Keep in mind not all lenders accept salary sacrifice payments on your mortgage. Some lenders, like NAB, accept salary sacrificing for home loans.
Salary sacrificing won’t work for everyone, but in certain circumstances there are benefits to paying your home loan from your pre-tax income. These include reduced tax liability and potentially paying off your home loan quicker.
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 can I apply for a first home buyers loan with Commonwealth Bank?
Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.
You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.
You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.
CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property. The link to download this app is available on the same webpage.
If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.
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.
What are the NAB term deposit interest rates for businesses?
If you’re looking to lock in a return on your business savings, one option is a business term deposit with NAB. The big four bank provides competitive interest rates while giving you the flexibility to choose the term. NAB offers business term deposit interest rates for investments of between $5,000 to $499,999.
NAB doesn’t charge any monthly account or application fees. The interest is calculated daily and for the 90-day term and six months term, you will get paid when the deposit matures. For the 12 months term, you can either choose to get paid monthly, quarterly, half-yearly or annually.
If you wish to withdraw your funds before the deposit matures, you need to give NAB 31 days notice. However, they do make exceptions if you’re experiencing hardship and need the funds immediately. Either way, you may have to bear the prepayment cost, which you can learn more about in the Terms and Conditions.
Can I get a Commonwealth Bank home loan during maternity leave?
The Commonwealth Bank considers several factors like your income, expenses, assets, and liabilities to determine whether you’re suitable for a loan. Being on maternity leave doesn’t mean you won’t get approved for a loan, provided you meet the lender’s other criteria. For example, you may have other savings or spousal income to support your application.
Having said that, it can be slightly more difficult to get a loan while you’re on maternity leave if you’re not being paid for your time off (which is often the case, depending on how long it’s for).
If you are looking to apply for a Commonwealth Bank home loan during maternity leave, here are some things that may help your application:
- Get a letter from your employer including details like your date of resuming work, salary when you return to work, and other employment terms
- Show the bank you have savings. Putting up a 20 per cent deposit may help and you could also avoid Lenders Mortgage Insurance (LMI)
- Calculate your income and expenses to apply for only what you can afford to pay.
- If you have a partner or guarantor to help with your loan, provide their financial details on your application.
Some people like to tell the lender they are on maternity leave before applying to see whether they qualify before going through the full process.
How do I apply for Westpac’s first home buyer loan?
If you’re a first home buyer looking to apply for a home loan with Westpac, they offer an online home loan application. They suggest the application can be completed in about 20 minutes. Based on the information you provide, Westpac will advise you the amount you can borrow and the costs associated with any possible home loan.
When applying for a home loan with Westpac, you’re assigned a home finance manager who can address your concerns and provide information. The manager will also offer guidance on any government grants you may be eligible for.
How do I get a CUA home loan pre-approval?
If you plan to take a home loan from CUA, then getting in-principle approval early in your buying process can help you progress faster and with confidence.
CUA’s pre-approval is given based on the information you provide about your income, outgoings and savings. CUA will estimate how much you can afford to borrow and pre-approve your home loan on that estimate.
The CUA home loan pre-approval is valid for 90 days, and if you cannot find a property within this time, you can ask to renew the pre-approval. A pre-approval is not the same as the final approval and only indicates your ability to borrow. You will get the final approval when you finalise the property, complete the application process and submit all documents.
If you are interested in a CUA home loan pre-approval, check the terms and conditions and contact details.
Can I get pre-approval for a home loan from BCU?
BCU offers home loan applicants a pre-approval that is valid for up to three months. To get the pre-approval, you’ll first need to provide information about your homebuying budget and whether you intend to occupy the home, through an online application form.
A specialist will then discuss your application with you and confirm that you’ve submitted all necessary documents.
If you meet BCU’s criteria, you could get the conditional approval within 2-3 days of this discussion.
Remember to get written confirmation of the pre-approval. You can then go back to the bank once you’ve selected the home you want to buy to get the final approval.
Can first home buyers apply for an ING home loan?
First home buyers can apply for an ING home loan, but first, they need to select the most suitable home loan product and calculate the initial deposit on their home loan.
First-time buyers can also use ING’s online tool to estimate the amount they can borrow. ING offers home loan applicants a free property report to look up property value estimates.
First home loan applicants struggling to understand the terms used may consider looking up ING’s first home buyer guide. Once the home buyer is ready to apply for the loan, they can complete an online application or call ING at 1800 100 258 during regular business hours.
How long does ANZ take to approve a home loan?
The process of applying for a home loan usually stays the same across all lenders. On the other hand, the time it takes for a lender to approve the home loan differs from lender to lender. When it comes to ANZ, it takes anywhere between 15 to 18 business days to approve a home loan from the day of the application to approval. This timeframe is highly dependent on the credibility and availability of your documentation. You can apply for an ANZ home loan in two ways; a Quick Start home loan application or a full online application.
If you opt for the Quick Start home loan option, you’ll need to fill out a form with basic details. During this stage, you don’t need to add any supporting information. An ANZ representative will then call you within 48 hours. The representative will help take your application forward, including assessing all relevant information, documentation and conducting a credit check.
You can also submit your entire home loan application with ANZ online by filling out a comprehensive form with all the information and documentation needed.
Once ANZ has conducted the preliminary checks, you’ll be informed of the pre-approved amount they’re willing to offer. Based on this amount, you can set a budget for your property search and make sure you stay inside your budget. Pre-approval will last for three months but can be extended by applying with ANZ if you don’t find a property. But it’s best to find a property as soon as possible as ANZ may decide to change the amount if your financial situation changes.
After you find a property and have your offer accepted, ANZ may send an assessor to the property to verify it’s value. If everything is per their terms and conditions, ANZ will finalise your home loan’s approval and release the funds.
How do you qualify for a CBA home loan with casual employment?
Qualifying for a home loan without a full-time job may be challenging, but it can be done. The first step is to understand how a CBA home loan is assessed when you have casual employment.
Most lenders will assess your expenses and savings while checking your loan eligibility, checking on factors crucial to home loan approval, such as if your bills are paid on time and what your credit score presently looks like.
Your income can be one of the most critical factors to determine your final approved home loan amount. As such, you’ll need to provide payslip copies to lenders to assist them in assessing your income during the loan tenure, regardless of your employment status, full-time, part-time, or otherwise.
Casual employees will want to be casually employed for at least 12 months to be eligible for a home loan. Alternatively, you want to have worked as a permanent casual worker (working for a fixed number of hours per week) for at least one month, or you should have been in your current job for a minimum of three months (if the hours are irregular) to be eligible for the loan.
How to apply for ANZ home loan during maternity leave?
Qualifying for an ANZ home loan while you’re on maternity leave may require some research.
Much like other home loan applications, you'll need to be able to show the lenders that you’ll be able to pay the mortgage instalments on time, even during maternity leave, which can improve chances of your home loan being approved. Your chances improve if you have savings, home equity, or if you receive any government-related benefits.
You’ll likely need to provide no less than three payslips you received before the start of your maternity leave and a letter from your employer, with the letter stating the maternity leave terms such as the date on which you’ll return to work and the kind of employment (full-time, part-time, or casual) when you resume.
Your lender will likely consider the tenure of your maternity leave while assessing your loan application. Lenders also prefer if you are paid while on maternity leave; however, you may receive only half your salary, so the lender may not consider your regular income to determine the loan amount.
What are the benefits of getting a pre-approved home loan from Citibank?
While hunting for your dream home, getting a Citibank home loan pre-approval can have multiple benefits, which include:
- You'll have an idea on your personal price range, which can save time to find your home.
- With a pre-approved home loan, you may find yourself with more financial control to better decide how much you can spend.
- A Citibank pre-approved home loan is a commitment by a lender that signals you're ready to jump into the property market.
You can apply for pre-approval by providing basic details, such as name, email, and phone number on the bank’s website. Alternatively, you can contact the bank on 1300 361 922 or find a home lending officer on the website.
Does Westpac offer loan maternity leave options?
Having a baby or planning for one can bring about a lot of changes in your life, including to the hip pocket. You may need to re-do the budget to make sure you can afford the upcoming expenses, especially if one partner is taking parental leave to look after the little one.
Some families find it difficult to meet their home loan repayment obligations during this period. Flexible options, such as the Westpac home loan maternity leave offerings, have been put together to help reduce the pressure of repayments during parental leave.
Westpac offers a couple of choices, depending on your circumstances:
- Parental Leave Mortgage Repayment Reduction: You could get your home loan repayments reduced for up to 12 months for home loans with a term longer than a year.
- Mortgage Repayment Pause: You can pause repayments while on maternity leave, provided you’ve made additional repayments earlier.
When applying for a home loan while pregnant, Westpac has said it will recognise paid maternity leave and back-to-work salaries. All you need is a letter from your employer verifying your return-to-work date and the nature of your employment. Your partner’s income, government entitlements, savings and investments will may help your application.
Should I apply for a NAB home loan pre-approval?
Buying a new home is an exciting event in anybody’s life. Getting pre-approval means you know what you can afford so you don’t waste time looking at properties outside your budget. With a NAB Bank home loan pre-approval, you can look for your new home with confidence. The lender knows you’re serious about the purchase and also exhibits a willingness to lend you money.
Applying for a NAB home loan pre-approval is relatively straightforward. You might be asked to provide proof of employment and income, details of any savings as well as any on-going debts. NAB may also conduct a credit check on you to see if you’d be a risky borrower. If NAB offers you pre-approval after these checks, you’ll know how much money they’re willing to lend you. The NAB Bank home loan pre-approval is valid for 90 days from application, so don’t apply too early and be aware of this when looking for a property. If your pre-approval expires before you find a property you’ll need to reapply.
You can apply online for NAB home loan pre-approval, visit your nearest NAB branch, call on 13 79 79, or set up an appointment. If you choose to book an appointment, it can be done in person, via video, over a call or you can have a NAB Bank representative visit you.