Non-Bank Lenders Comparison

Find out how you could benefit from a non-bank lender.

Before the Australian banking industry was deregulated in the first half of the 1980s, homebuyers had only banks, credit unions and building societies to turn to when in need of a home loan. These resulted in many Australians with a low income or less than stellar credit history being denied the opportunity to own a home.

With deregulation came a number of non-bank lending institutions that were offering home loans at interest rates below what the banks were offering. This forced banks to also lower their rates, creating a competitive market for home buyers to shop for loans.

Compare non-bank home loans

Rates last updated May 23rd, 2019
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
$0 p.a.
This mortgage combines a very sharp interest rate with a 100% offset account and it's available with a 5% deposit.
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A simplified mortgage with a low interest rate and a redraw facility. Approval fee waived for a limited time.
$395 p.a.
Get interest rate discounts and waived fees on this package loan with a 100% offset account. $500 cashback offer for first homebuyers borrowing over 80% and paying LMI.
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This high LVR fixed rate loan allows you to borrow up to 95% of the value of the property you're buying. Approval fee waived for a limited time.
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A two year fixed rate home loan with no annual or application fees.

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What is a non-bank lender?

A non-bank lender is an institution other than a bank, credit union or building society that is offering loan products to consumers, including investment banks, mortgage originators, insurance companies, mortgage brokers and more. These lending institutions do not hold a banking licence, but they are also tightly regulated, as defined by the Consumer Credit Code, which governs all credit transactions in Australia, and by the Australian Securities and Investments Commission (ASIC).

The Australian Securities and Investments Commission sets regulations requiring all lenders to openly disclose any fees or rates associated with their products and that this information is readily available to consumers. The difference in regulation is with the Australian Prudential Regulatory Authority (APRA) which oversees banks only to ensure that they hold to financial promises made to you.

Non-bank lenders are privately owned and not mutual, typically relying on wholesale sources to get their funding. Their services are limited when compared to those that banks offer, but do include basic and fully featured home loans, line of credit loans, low doc loans, reverse mortgages and bad credit loans. Some of the features offered by banks could be missed since there are no other types of services like credit cards or transaction accounts available with a non-bank lender.

What is the main difference between a non-bank lender and a regular bank and how will it affect me?

As a privately owned financial institution, a non-bank lender has more flexibility in the rates and fees that are offered for their home loans. This allows them to compete with the banks by undercutting the cost of their products. In doing so, the banks have to respond to the competitive market and lower theirs as well.

This ability to set their own rates has helped the Australian home loan market respond to the needs of homebuyers by generating competition. You and other consumers benefit by being able to find home loans from any type of financial institution with reduced fees and lowered interest rates.

What happens if a non-bank lender goes bust?

The dependence that non-bank lenders have on a steady economy make them more vulnerable during times of financial turmoil. This was seen during the global financial crisis, when some Australian non-bank lenders were forced to close their doors. If this were to occur with your non-bank lender they can’t force you to pay your loan balance in full. Also, you wouldn’t get a free pass on the balance of your loan. Your obligation would be to continue making repayments as normal. If ownership does change, the terms of your original contract will remain in effect.

Glenn Braganza

  • Glenn is the Chief Strategy Office of 1st Choice Financial, Concord, NSW.
  • Glenn specialises in mortgages, financial planning, self-managed super funds advice, and mortgages and insurance for medical professionals.

How do non-bank lenders work and how are they different to a regular bank?

The differences are slightly exaggerated - a lot of it is media hype. Most non-bank lenders get their money from banks themselves. They try to minimise costs and lower their overheads - then they’re in a position where they can try to beat the banks. The crazy part is that they beat the banks with their own money. They sell wholesale funds to these mortgage managers. The mortgage managers then package the funds and on-sell it to give you loans, and depending on the cost associated and the margin they can get, that’s how they make their money.

Why do you think non-bank lenders are popular?

The advantage is flexibility in rates, because they have a margin to work with, and they can go absolutely rock-bottom.

People also love their service. I started out at a non-bank, and they have a huge amount of clients. Clients don’t want to move from them, they don’t want to go to the banks. A lot of people go there because of a bitter experience with banks, and from a service level there’s an advantage there because they get funds at wholesale and sell it at retail.

At the end of the day there’s a service proposition there that people are happy about. A non-bank lender will work on the assumption that a customer thinks a bank treats them like a number, so they’ll go to a smaller lender, and that lender gives them good customer service. It’s a win-win situation for a client, and is a customer service proposition that banks may or may not have.

Non-bank lenders keep the banks honest. They act as a bank’s conscience in a way. If the banks get back into the state where they’re the only ones in the market, especially after the GFC, then you lose that edge.

Are there any disadvantages that you can see with a non-bank lender?

There could be inconsistencies in passing on the rate cuts and things like that, so it’s not always the case, because they get money from another source where they’re getting it at the same rate, and that stems from where they’re getting their money from. If they’re mortgage managers they’ll be getting it most of the time from the banks, but they could also get private funding and that process will be a bit more difficult, and the rate could be quite different.

What types of loans do non-bank lenders have?

  • Basic home loans. A basic home loan can be either at a fixed or variable rate but will not have any added features.
  • Full feature home loans. Full feature usually refers to the loan having added benefits such as a redraw facility and offset account.
  • Split rate home loan. This is a home loan where a portion of the terms are at a fixed interest rate and the balance at a variable rate.
  • Reverse mortgages. A reverse mortgage is designed for seniors and allows them to use the equity built into their home.
  • Bridging loans. A bridging loan allows a home buyer to continue paying a home loan on one property while waiting for a new construction to be completed, or to assist with moving into another property.
  • Bad credit loans. A bad credit loan is a home loan that allows for individuals who have a previous bad credit history to qualify. In most cases the interest rate will be slightly raised to make up for the extra risk.
  • Low doc home loan. Self employed individuals may have a difficult time obtaining a home loan due to a lack of paperwork supporting their income earned. A low doc loan measures their financial capability in a different way to determine eligibility.

How can you compare home loans from non-bank lenders?

You are going to be looking at the same features with a non-bank lender as you would with a bank when deciding between non-bank lenders. These include things such as:

  • Interest rates. Non-bank lenders must disclose their interest rate and comparison rate. When looking over the comparison interest rates make sure that they are for the same terms and for the same borrowing amount.
  • Fees. This includes application and settlement fees along with any monthly or annual fee. Also look at the fees for special features such as redraw facilities.
  • Features. There could be some features that you won’t find with a non-bank lender due to their lack of other banking products, but you should still check for flexible repayments, extra repayments and penalties, interest-only repayments and charges for an early payout. Other features to consider are portability, offset accounts and loan purpose.
  • Eligibility. Although non-bank lenders have more flexibility with qualifying individuals for a home loan, they are still bound to ensure that the terms will not put you under financial hardship. Check over your finances and expenses before hand and use a home loan calculator to make sure that your income will allow you to be eligible for a home loan.

List of non-bank lenders in Australia

Things to consider when getting a loan from a non-bank lender?

You should compare the home loans offered by non-bank lenders in the same way that you do with banks, looking at the interest rates, fees and features and finding the home loan that suits your needs. Take advantage of home loan calculators which can show you based on that criteria, and your desired home loan amount and terms, which home loan option gives you the most value.

Frequently asked questions about non-bank lenders

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15 Responses

  1. Default Gravatar
    PaulOctober 20, 2018


    We have a home loan in joint names. I have been made redundant the last 18 months and we were going to consolidate our debt by combining our credit card debt but have been told because I am not working and my wife not earning enough they would not refinance our loan. Is it possible to refinance with another bank, we have around $300,00 equity in our current loan but was told that did not matter.

    • Avatarfinder Customer Care
      JeniOctober 26, 2018Staff

      Hi Paul,

      Thank you for getting in touch with finder.

      Sorry to hear that.

      You could try to refinance with your current lender to consolidate debt (same lender but maybe you can get a lower rate, or same rate but roll card debt into the mortgage, it’s still cheaper that way). It is also best to speak to a mortgage broker, who can help guide refinancers in tough situations.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!


  2. Default Gravatar
    March 19, 2018


    We have been declined for a refinance loan by a big four bank, it doesn’t make sense as we are consolidating debt incurred from renovations. And they said we spend too much. Go fingers. Anyway we had a great valuation from the bank and feel we may not get another bank val of the same value if we have to go to another lender, we are looking at non bank lenders now, and want to know if there is any way we ca use the bank val that we already have at another institution?

    • Avatarfinder Customer Care
      JeniMarch 19, 2018Staff

      Hi Rose,

      Thank you for getting in touch with finder. When it comes to refinancing home loans, comparing your loan options is the obvious starting point. This requires that you compare interest rates as well as a range of loan features. Comparison is by no means a difficult procedure, but it can be time-consuming. And if you have a complex set of circumstances, you may need some guidance to find the lender best suited to your situation. You may still show or bring your bank valuation, lenders might look into it for reference as well.

      A good mortgage broker can help you determine the best possible options for your needs. You can benefit from the expert opinion your broker imparts. So I suggest that you speak with a mortgage broker to assist you further.

      I hope this helps.

      Have a great day!


  3. Default Gravatar
    June 30, 2017

    Six months ago before we sold our home, the bank informed me that I would be eligible for a loan if needed to purchase our next home. We have total equity in our existing home.

    When we sold and asked for a small loan they declined it hinting that the more we enquire about a loan, it would mean we would get a bad credit rating. We are an elderly and require just enough to make up for the sharp upswing in the market and is confused by the threat of a ” bad credit rating”

    As far as I am aware we have always paid our bills, maybe sometimes not on time because of the sudden switch from paper bills to email ones.

    Any explanation would be a relief thank you.

    • Default Gravatar
      JonathanJuly 1, 2017

      Hi Jenny!

      Home loan application is considered a “hard inquiry” which may make your credit score lower especially if done within a short-period of time.

      If you wish to get other options on applying for a home loan that can be offered to pensioners, you may consider the lenders offered on this page.

      Hope this helps.


    • Default Gravatar
      July 1, 2017

      Thanks Jonathon I’ll do that, sorry about enquiring again but I couldn’t find this page!

  4. Default Gravatar
    BrettApril 3, 2017

    My question is, when mortgaging with a non-bank lender, is the money I have in the offset account covered by the government guarantee?
    As savings accounts (with balances up to $250k) are with one of the “Big4”.

    • Avatarfinder Customer Care
      MayApril 4, 2017Staff

      Hi Brett,

      Thank you for your inquiry.

      Which bank do you have your savings account with? Usually, savings accounts from banks (other than the “Big 4”) and other financial institutions are covered by the government guarantee up to $250,000. You can check/confirm that through ASIC if you like.


  5. Default Gravatar
    LinMay 11, 2016

    Hi Just wonder do you still lend to foreign investors?
    If you do, what kind of deposit I need to have please. thanks

    • Avatarfinder Customer Care
      MarcMay 11, 2016Staff

      Hi there Lin,
      thanks for the question.

      Each lender will have their own policy regarding foreign investors, with some not lending to foreign investors and others lending but sometimes with added requirements or restrictions. It’s best to compare loans and then contact any lenders you’re interested in borrowing from to see what their policy is.

      I hope this helps,

  6. Default Gravatar
    FionaSeptember 11, 2014


    • Avatarfinder Customer Care
      ShirleySeptember 12, 2014Staff

      Hi Fiona,

      Thanks for your question.

      If you’d like to refinance with one of the lenders on this page, please click ‘go to site’ to submit an enquiry.

      If you’re not sure which lender to approach, I’d recommend that you get in touch with a mortgage broker. A mortgage broker is a home loan expert who can help you find the right loan for your situation.


  7. Default Gravatar
    BebeJanuary 27, 2014

    Will any of the lenders, consider a person over 50 for a homeloan. I have a deposit but will need to borrow approx $250,000 on a salary of $60,000.

    I am a university graduate with no debts who wants to work in NSW but only if I can buy a home.

    • Avatarfinder Customer Care
      MarcJanuary 28, 2014Staff

      Hello Bebe,
      thanks for the question.

      All of the lenders we spoke to regarding this same question last week said there’s no maximum age when borrowing for a home loan. If the lender feels that you satisfy their lending criteria they’ll approve the loan. You may wish to contact some lenders before making any applications and enquire as to their policies before making any formal applications.

      I hope this helps,

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