home-loan-credit-check

Home loans: Credit check

Your credit history may be more important than you think when applying for a home loan, but there are options available if you have a bad credit history.

A home loan involves a financial provider lending you an agreed amount of money to purchase a home. Home loans have terms and conditions that are set by the financial lender and agreed upon prior to entering into the loan. Credit plays a huge part in whether your home loan application is approved or not.

Lenders need to see proof that you have a good credit history and that you will be able to pay back the money you have borrowed from them. Your credit history could be the difference between you being successful when applying for a home loan or being unsuccessful. It’s important that you be mindful of your credit history.


How does your credit affect your ability to access home loans?

Your credit history directly impacts on your ability to access home loans. When you apply for a home loan, banks and lenders check your credit file before you can get approved. Your credit file acts as a representation of your credit history and can include: unpaid bills, getting declined from a loan, late payments, if you have applied too often or if you have declared bankruptcy.

The lender will check your credit file and if you do have any negative marks, your options will be limited. All your past dealings with borrowed money are collected and is used as an indication of your future ability to make repayments. This is why your credit history is so important when applying for loans.

What is good and bad credit?


How do home loans work?

Home Loan

A home loan is one of the most popular options when you are in need of money to purchase a home. Home loans are provided by banks, financial lenders and credit unions. If you are unsure how to select a home loan or don’t have the time or financial know-how, you may chose to utilise a mortgage broker. A mortgage broker acts and negotiates on your behalf to find you the best home loan depending on your situation.

Home loans aren’t just used for purchasing a home to live in. They can be taken out when you are building a home or when you are investing in a property. Most people can have access to a home loan, even first home buyers. You can typically apply for a home loan online, over the phone or in person. You can also apply for a home loan through your mortgage broker.

You repay your loan and interest in the form of regular repayments. Every month you are required to make at least one repayment to repay back the value of your home loan along with the interest you have accumulated. Some home loans allow you to make weekly or fortnightly repayments to help you pay off your loan sooner.

About home loans


Home loan options with bad credit

Fortunately, even if you do have a bad credit history, there are still some options available to assist you in successfully getting a home loan.

  • Non-conforming lenders. A non-conforming lender will go outside a regular lender’s financial guidelines. This means, they may have different requirements compared to normal lender’s home loans. While these loans are an option for people with bad credit, they come with a few key differences. Loans from non-conforming lenders tend to be risky for the lender, this is why they often charge higher fees and rates to cover themselves.
  • Wait for negative marks to be removed from credit file. Another option you have is to wait for negative marks to be removed. Your credit history doesn’t stay on file forever. In most cases, your credit file usually goes back to how it was within five years. If you are able to wait for negative marks to be removed, this can significantly help you when applying for home loans.
  • Credit repair. Credit repair is the process of an agency refuting any incorrect listings on your file. If successful, you can have these errors removed from your credit history which, in turn, leads to a clean credit file. Keep in mind that this is an expensive process and there is no guarantee that listings can be removed, so be wary of any credit repair agency that claims they will be able to do this.

Improving your chances of being approved for a home loan

There are a few different ways that can help you improve your credit file and chances of being approved for a home loan, including:

  • Regularly check your credit file. Doing this will ensure that banks or lenders don’t incorrectly place negative listings on your file. It’s also an important step in safeguarding yourself against identity theft. Checking your credit file will ensure there’s no errors and if there is something wrong, fixing the errors will improve your chances of being approved for credit.
  • Pay bills on time. Ensuring you pay your bills on time is one of the most simple ways to improve your credit rating and keep your file clean. You will also look like a responsible borrower to potential lenders.
  • Consider debt consolidation. Debt consolidation is when you consolidate all your debts into one. It will make your repayments easier, as you will only have the one to worry about, and you can significantly reduce your interest. Getting in control of your debt can assist you in improving your credit history.
  • Refinance. You may also want to consider refinancing. Making the switch may help you better manage your debt or find a more suitable home loan for you. You shouldn’t rely on refinancing as a way to get you out of trouble, however, it could potentially improve your chances of success when applying for a home loan.
  • Don’t apply for too many loans. Applying for loans too often and being unsuccessful can hurt your credit rating. Making too many enquiries will raise red flags to lenders as it may indicate that you are irresponsible.

Types of home loans

Not everyone is in the same position when borrowing money, and not everyone has the same financial needs. This is why there’s a range of different home loans available so you can select one that best aligns with what you need.

  • Variable. These types of home loans offer a variable rate, meaning your interest rate typically adjusts with the Reserve Bank of Australia (RBA) cash rate. These loans allow you to take advantage of low interest rates, but you must also be prepared for rate rises. Variable home loans tend to have more flexibility and more features.
  • Fixed. Fixed rate home loans are a secure form of borrowing as your interest rate is fixed for a period of time. This means your repayments will stay the same and won’t change during the fixed period. They allow for budgeting and also give you security as you are protected from interest rate increases. However, they aren’t as flexible as variable loans and may not offer the same features.
  • Line of credit. A line of credit works differently to a normal home loan. You agree upon a set credit limit, which is normally quite high. You don’t need to make repayments every month and you can take out additional funds when you need to, as long as you don’t go over the agreed-upon limit. It’s important to keep in mind that at some point you will still have to pay off your line of credit.
  • Low doc. Low doc home loans are just as the name suggests. They require a low amount of documentation in the application process and are appropriate for those who own their own business or are self-employed. Typically you would take out a low doc home loan if you can’t provide the normal documentation required for a home loan, such as evidence of a regular salary.
  • Construction. Construction loans are designed for those who are building a home. You can often use the home loan to purchase the land and arrange for contractors to build your home. Instead of making repayments, you make ‘progress draws’. This works as a percentage of the total building costs, payable to the builders through the building process. You typically don’t begin to make principal and interest repayments until your home has been built.

Online home loans

Compare home loans

Rates last updated December 10th, 2018
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.59%
3.61%
$0
$0 p.a.
90%
Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online. Available with just a 10% deposit.
3.59%
3.59%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
3.64%
3.66%
$0
$0 p.a.
80%
A simple mortgage with a competitive interest rate and no application or monthly fees. Borrow up to $2000000 from a convenient online lender.
3.57%
3.58%
$0
$0 p.a.
80%
Get a very low interest rate and avoid big fees. Apply online for full approval in under 30 minutes and add a 100% offset account for $10 a month.
3.54%
3.58%
$0
$0 p.a.
80%
Get a competitive rate, save on fees and access a 100% offset account plus redraw facility. $900 cashback offer.
3.64%
3.64%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.68%
3.70%
$0
$0 p.a.
80%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
3.75%
3.75%
$0
$0 p.a.
70%
A simple mortgage with no application or ongoing fees that has extra repayments plus split and redraw options. Requires a 30% deposit.
3.88%
4.51%
$0
$395 p.a.
90%
Lock in a very competitive 2 year rate and get package discounts on your credit card and offset account. $1,500 cashback available (conditions apply).
3.79%
3.80%
$0
$0 p.a.
90%
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000. Plus $1,500 cashback offer for eligible refinancers.
3.80%
4.05%
$0
$0 p.a.
70%
Earn tens of thousands of Qantas Points to spend on flights, hotels and more with this variable owner occupier mortgage. Competitive variable rate mortgage that requires a 30% deposit.
3.54%
3.57%
$0
$0 p.a.
80%
A competitive variable essentials interest rate product aimed at refinancers looking to switch to a lower rate.
3.85%
3.85%
$0
$0 p.a.
80%
Low fee loan with extra repayments. Pay no application and ongoing fees and take advantage of split and redraw options.
3.59%
4.00%
$845
$350 p.a.
90%
Get a low variable interest rate and buy a property with just a 10% deposit. 100% offset account attached.
3.68%
3.82%
$0
$10 monthly ($120 p.a.)
80%
Earn Velocity Frequent Flyer Points with this mortgage to spend on flights and more (for a limited time, subject to eligibility requirements). Redraw facility available on this variable rate home loan. Competitive interest rate.
3.69%
4.86%
$0
$395 p.a.
90%
Special discounted rate for first home buyers. Start your home buying journey with 2 years of fixed repayments at a competitive rate plus package discounts. Available with a 10% deposit.
3.88%
3.89%
$0
$0 p.a.
90%
Save on interest with a free 100% offset account and buy your property with just a 10% deposit.
3.87%
3.91%
$600
$0 p.a.
95%
A home loan with no ongoing fee and a redraw facility that you can borrow up to 95% LVR.
3.69%
4.12%
$0
$395 p.a.
80%
Unlock a range of savings with this competitive package home loan offer. Offset account and redraw facility included.
3.68%
3.70%
$0
$0 p.a.
80%
A competitive variable rate mortgage for owner occupiers that comes with a no fee debit card with a $5,000 limit.
3.74%
4.01%
$395
$0 p.a.
80%
A competitive fixed interest rate product with no ongoing bank fees.
3.79%
3.82%
$0
$0 p.a.
80%
An essentials variable investor mortgage with a high borrowing amount so you can fund a large purchase.
3.67%
3.72%
$600
$0 p.a.
80%
Family guarantee option available. Enjoy flexible repayments and a low minimum loan amount.
3.75%
4.72%
$0
$299 p.a.
95%
Owner-occupiers can enjoy a discounted fixed rate, a rate lock feature and the ability to make additional repayments.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
Earn Velocity Frequent Flyer Points on your mortgage (subject to eligibility requirements). Plus, access a 100% offset account to save on interest.
3.74%
4.13%
$0
$349 p.a.
90%
Get a sharp rate plus package discounts and a 100% offset account.
3.84%
3.85%
$0
$0 p.a.
70%
Keep your LVR at 70% or below and enjoy a special discounted rate. Also, pay no application or ongoing fees.
3.64%
3.59%
$0
$0 p.a.
80%
Fast, 100% online application process. Very limited fees. Optional offset account (with fee).
3.74%
3.74%
$0
$0 p.a.
110%
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, Qld and ACT only.
3.79%
3.79%
$0
$0 p.a.
80%
Access an offset account and pay no application or ongoing fees on this special variable rate for owner-occupiers.
3.59%
3.99%
$600
$395 p.a.
95%
Get interest rate discounts and waived fees on this package loan with a 100% offset account.
3.71%
3.71%
$0
$0 p.a.
70%
A variable rate home loan that has a lot of flexible features. This loan has a 100% offset account.
3.98%
5.01%
$0
$395 p.a.
90%
Fix the rate on your investment property for 2 years with this competitive home loan package.
3.72%
3.74%
$0
$0 p.a.
80%
Save on interest by taking advantage of a 100% offset account along with no ongoing fees or application fees.
3.83%
4.89%
$0
$395 p.a.
80%
A flexible 3 year fixed rate loan you can use to buy your own home.
3.64%
3.64%
$0
$0 p.a.
70%
A basic variable home loan that offers a competitive interest rate with no application fees and no ongoing fees.
3.84%
3.84%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a free redraw facility with this innovative online lender.
3.87%
3.91%
$0
$10 monthly ($120 p.a.)
90%
Get Velocity Frequent Flyer Points at settlement, monthly and every three years, plus the option to make up to $10,000 a year in extra repayments.
3.59%
4.14%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
3.85%
4.69%
$0
$0 p.a.
90%
A package home loan with a sharp fixed rate and a 10% deposit option for low deposit borrowers.
3.70%
3.90%
$0
$0 p.a.
70%
Enjoy all the benefits of the Basic Home Loan and take advantage of an offset account.
3.74%
3.74%
$0
$0 p.a.
80%
A basic owner-occupier home loan with a low variable rate that requires a 20% deposit.
3.89%
4.27%
$0
$395 p.a.
80%
New borrowers or refinancers can get a discounted rate with this package loan.
3.59%
3.58%
$0
$0 p.a.
80%
Apply online and get fast approval for this fixed rate, low-fee loan with redraw facilities. Add a 100% offset account for a small fee.
3.99%
4.13%
$0
$10 monthly ($120 p.a.)
80%
A competitive variable rate home loan with no application fee.
3.62%
3.62%
$0
$0 p.a.
95%
A low deposit mortgage with a competitive rate and plenty of flexibility. QLD residents only. Eligible borrowers can get a 15% discount on home and contents insurance for the life of their loan.
3.84%
3.82%
$0
$0 p.a.
80%
A fixed rate loan with free redraws, few ongoing fees. Apply online with a fast approval process.
3.89%
3.94%
$0
$0 p.a.
80%
Pay no application or ongoing fee and borrow up to 80% LVR.
3.73%
3.87%
$0
$10 monthly ($120 p.a.)
80%
Borrow up to $500000 and earn Velocity Frequent Flyer Points (terms and conditions apply).
3.75%
4.00%
$0
$248 p.a.
70%
Borrowers with a 30% deposit can get this competitive rate. Cut down on interest costs with a 100% offset account.
3.69%
4.75%
$0
$395 p.a.
90%
Enjoy a competitive rate with no application fee for this package loan.
3.79%
4.87%
$0
$395 p.a.
95%
Low deposit home loan. Enjoy flexible repayment options while paying limited fees.
3.81%
3.81%
$0
$0 p.a.
80%
A home loan with a competitive rate and plenty of handy features. This product comes with a 100% offset account.
4.04%
4.07%
$0
$0 p.a.
90%
For a limited time, pay no application or settlement fees. You can also take advantage of a free redraw facility.
3.97%
3.99%
$0
$0 p.a.
80%
Package your owner occupied loan with investment loan and receive a discounted investment rate. 100% offset account included.
3.69%
4.08%
$0
$349 p.a.
90%
Package your loan with other AMP products and save on rates and fees.
3.93%
3.94%
$0
$0 p.a.
80%
A low-fee line of credit loan from an online lender. Unlock the equity in your home and make interest-only repayments with a competitive rate.
3.89%
3.91%
$0
$0 p.a.
80%
This variable rate loan keeps the features simple and fees low. This loan is offered by a 100% online lender.
3.94%
3.94%
$0
$0 p.a.
70%
Investors with a 30% deposit can get this low rate loan to fund their property portfolio. Take advantage of split and redraw facilities.
3.89%
3.94%
$0
$0 p.a.
90%
Borrow up to 90% of the value of the property you're buying, and pay no application fee.
4.13%
4.14%
$0
$0 p.a.
90%
Access a fee-free offset account and a special interest rate for investors.
4.18%
4.18%
$0
$0 p.a.
80%
Investors get a 100% offset account and pay no application or ongoing fees on this loan from an innovative online lender.
3.72%
3.72%
$0
$0 p.a.
90%
New customers can get a discounted variable rate and a fee-free redraw facility. NSW, QLD and ACT residents only.
3.94%
4.95%
$595
$0 p.a.
95%
Borrow up to 95% LVR of the value of the property you're buying and pay no application or ongoing fees.
3.70%
3.70%
$0
$0 p.a.
70%
Get a discount for keeping your LVR at $70% or below with this innovative online lender.
3.99%
4.86%
$0
$0 p.a.
80%
Access a fee-free 100% offset account and pay no application or ongoing fees.
3.99%
4.62%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
3.69%
4.54%
$0
$395 p.a.
90%
A fixed rate loan with a 100% offset account and the option to make additional repayments. Loans over $150000 receive a discounted rate. NSW, QLD and ACT residents only.
4.29%
4.26%
$0
$0 p.a.
95%
A competitive 3-year fixed rate loan with a high max insured LVR.
3.99%
3.99%
$0
$0 p.a.
80%
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.

Compare up to 4 providers

Aussie Home Loans Logo

Enter your details below to receive an obligation-free quote from an Aussie home loans expert today

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie IQ and Aussie Optimizer products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 ("Aussie"), and its appointed credit representatives. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133 Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Optimizer products is provided by Perpetual Limited ABN 86 000 431 827 (Lender). Credit for Aussie IQ is provided by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502. Home loans issued by the Lender are serviced by Macquarie Securitisation Limited ABN 16 003 297 336, Australian Credit Licence 237863 (MSL).

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2018 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the finder.com.au Privacy and Cookies Policy, Terms of Use, Disclaimer & Privacy Policy and the Aussie privacy policy.

Aussie Home Loans is both a lender and a mortgage broker, and offers a range of services.

  • FREE Suburb and Property Report with every appointment.
  • Access 3,000+ loans from over 20 lenders.
  • Get expert help with your loan application, including paperwork and eligibility.
  • Over 1000 brokers who are able to help you in your local area.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 5 years running (2013-2017)

Remember that to be eligible for most home loans in the market, you'll need a good credit history because the loan amounts are big. If you have bad credit, you may want to consider repairing it first so you can have lower interest rates.

Picture: Shutterstock

Jeremy Cabral

Jeremy is a publisher for finder.com.au, he is also a personal finance all-rounder specialising in: Credit Cards, Savings Accounts, Personal Loans, Home Loans & Online Shopping.

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site