Together, CBA, Wesptac, NAB and ANZ are known as the Big Four. As giants of the banking industry, they have a large suite of loan products, extensive in-person branch networks and big customer support teams.
But smaller Australian lenders and non-banks can offer great service and competitive interest rates, too. They are regulated by APRA and ASIC, just like the Big Four, and can offer home loan features and cashback offers, just like the Big Four.
And at the moment, banks big and small are competing for your business, with the lowest interest rates ever offered. See how the Big Four's home loans stack up against the rest of the market and find the right loan for you.
See how the Big Four banks compare with other lenders
The table below contains some of the most competitive fixed and variable rates from Australia's Big Four banks plus comparable offers smaller banks, non-bank lenders and online lenders. While some of the products listed here are not currently available through Finder the "Enquire now" buttons allow to you leave your details and speak to a mortgage broker who can help you.
Tell me more about the Big Four
Australia's four banking giants are all unique in their own way and together, they account for roughly 75% of all mortgages in Australia.
- The Commonwealth Bank. Australia's largest bank, CBA is a massive institution with a strong market share and over 15 million customers. The bank has an extensive branch network and a popular banking app.
- Westpac. Australia's second biggest bank, Westpac started life as the Bank of New South Wales in 1817. Westpac owns many well-known finance brands, including St.George, Bank of Melbourne and BankSA.
- NAB. The National Australia Bank has been around for almost 160 years and has 9 million customers, mainly in Australia and New Zealand but also across the globe. Digital lender UBank is owned by NAB.
- ANZ. This bank has a strong presence in both Australian and New Zealand. ANZ now operates in 33 markets around the world.
How much of the mortgage market belongs to the Big Four?
The Big Four are the largest players in Australia's home loan market by far. To understand just how large their share of the market is, here's a snapshot of the latest APRA data showing the value of owner occupier and investor loans held by the Big Four and several of their nearest competitors.
This table shows the value of home loans "on the books" at each institution. Even the smallest of the Big Four holds more than three times more mortgages in dollar terms than the next smallest competitor.
Of course, market size and dominance is not necessarily an indication of whether a lender's loans are suitable for you. Nor is it an indication of quality customer service.
Big Four bank home loan features
A home loan from one of the Big Four offers the same features as other lenders. Features such as extra repayments, redraw facilities and offset accounts are common.
Package loans
While by no means exclusive to the largest banks, the Big Four often advertise their premium package loans. These products let you bundle a home loan with a credit card, bank account (which functions as an offset account) and other products. These days, the big banks often have the most competitive offers on their package loans and may offer a cashback if you switch to them from another lender.
And that's a big part of why banks do package loans. They want all your business, not just your mortgage.
Basic home loans and introductory discount rates
Again, not exclusive to the Big Four, but these banks frequently offer these two types of products. Basic home loans have low variable rates (usually) but don't have offset accounts. Introductory rate loans offer a very low (usually variable) rate for an initial period, but increase later.
What are my alternatives to a home loan from the Big Four?
Mortgage lending in Australia is a thriving, crowded industry, with lenders big and small looking to lend you money. So it's always worth comparing a wide range of home loans. Alternatives to the major lenders include:
- Online lenders. If you're comfortable with applying online or over the phone an online lender could be convenient and save you money. These lenders often have the cheapest interest rates.
- Non-banks. Credit unions, building societies and other non-bank institutions offer mortgages and are also very competitive. Some of these institutions limit their lending to states, cities or geographic regions.
- Smaller banks. Many local banks can serve customers in cities, states or large portions of the country. There are also newer bank brands, often operating online, which offer cheaper rates. Some of these brands are owned by one of the Big Four.
- Fintechs and neobanks. Smaller, high-tech startups are beginning to enter the mortgage market. They can be very competitive and convenient if you're comfortable with banking via an app.
Lenders in the categories above often overlap. A small bank could be entirely online, while credit unions may have limited physical branches and a strong online service. And some banks are starting to use the technology of the fintechs.
Is my cash safer with a big bank?
Not necessarily. All of Australia's Big Four are Authorised Deposit-Taking Institution (ADI). But so are almost all the smaller banks, credit unions and digital banks. You can find more detailed information here.
In the unlikely event your lender goes bankrupt, it won't affect your ownership of the property as your loan account would pass to a new institution, who bought the assets of your now-defunct lender.
The only lenders who might not be covered by the bank guarantee scheme are very small neobanks, which are essentially financial start-ups. Most of these companies obtain a banking license or partner with someone who has one, and is an ADI. .
What are the benefits of getting a mortgage with a big bank?
There are plenty of reasons borrowers stick with NAB, ANZ, Westpac or the Commonwealth Bank:
- Convenience and service. The Big Four have the largest networks of ATMs and physical branches. For many people, face-to-face service and brick and mortar branches are very important.
- Product range. The big lenders have products for most Australian borrowers and a greater range than many smaller lenders.
- Stability. Even small Australian lenders are heavily regulated, so this shouldn't be a big concern. But the Big Four are the oldest and biggest lenders for a reason.
- Service. The Big Four have large customer service departments. They are also the most likely to have dedicated migrant banking services for non-residents.
Are there any downsides to banking with the Big Four?
In most respects the Big Four are as good as any other lender. But depending on what you're looking for, you might be better served with one of their smaller competitors. Here are a few reasons why:
Lowest interest rates
Most of the time, the Big Four banks don't offer the absolute lowest interest rates on the market. Smaller lenders, especially online lenders, could offer more competitive deals, with their reduced overheads and online infrastructure. In the current market, each of the Big Four offer very low fixed rate home loans that are among the lowest on the market (you can compare some of them in the table above). The Big Four banks also offer quite competitive variable rate loans too.
Options for non-conforming borrowers
The Big Four don't specialise in loans for borrowers who have unique needs, such as borrowers who are self-employed, have a complex financial situation, have poor credit histories or are discharged bankrupts. This is where mortgage brokers and smaller, specialist lenders can help, as their loan policies and lending criteria may be more flexible.
Technology and customer service
The Big Four have strong online banking and well-designed apps, but there are smaller fintech lenders and neobanks who offer faster service, better apps and more tools to help you manage your mortgage. Although the gap in technology between new players and the old banks is shrinking all the time.
What about trust, stability and regulations? Are the big banks safer?
Australian lenders are relatively stable. As mentioned earlier, all registered financial institutions, regardless of their size, are regulated by the Australian Prudential Regulation Authority (APRA) and the Australian Securities & Investments Commission (ASIC).
Financial institutions are required to hold a certain portion of capital, as they provide a permanent commitment of funds and are available to absorb losses.
The lender takes on the risk, not the borrower
If your lender went bankrupt tomorrow you would still owe money to whoever took control over your old lender. This is quite rare, and wouldn't actually affect your mortgage contract.
Some smaller lenders are actually backed by the Big Four
You might not know this, but the nation's biggest institutions own or are associated with the following financial brands:
- NAB. UBank is a digital bank owned by NAB, although it operates by its own brand philosophy and strategy.
- Westpac. This bank actually owns St.George, Bank of Melbourne, BankSA and RAMS.
- Commonwealth Bank. BankWest is fully owned by Commbank. They also own Aussie Home Loans.
- ANZ. Alone of the Big Four, ANZ really only lends mortgages under its own brand.
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Hi Sir,
Me and my husband are both Australian citizen but now both working in overseas with overseas income. We have an existing mortgage loan with Westpac and now want to refinance the loan with cash out (for personal use). I have talked to Commonwealth bank but they require both my husband and myself to sign the documents in the branch in Australia. However, we are unable to come back to AU in the short period of time.
It seems that not many bank will accept application with overseas income.
Is there any other bank/financial institution will accept application for my case?
Looking forward to hearing from you.
Best Regards,
Kathy
Hi Kathy,
Thanks for getting in touch with Finder!
Yes, there are options to refinance your home while you are overseas. See our home loans for Australian expats guide.
Kindly note that each lender has its own approach to foreign income. Most Australian lenders will only accept a certain percentage of your foreign income, which allows a lender to protect itself against factors such as fluctuating exchange rates. Also, lenders accept major currencies such as British Pound Sterling, US Dollar, Euro and etc. You can see part of the page saying “How is foreign income treated?”
As a friendly reminder, review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the bank should you need any clarifications about the policy.
Hope this helps!
Best,
Nikki