Non-Bank Lenders Mortgage Comparison
There are so many non-bank lenders in Australia offering flexible, competitive mortgages. Compare rates from 3.08%.
While many Australians stick with the larger banks for the mortgages there are actually many non-bank institutions which will lend you money. These lenders can be local to your region or nationwide lenders who are 100% online. With fewer (or no) branches and the need to compete for new customers, many non-bank lenders offer some of Australia's lowest home loan rates.
Compare non-bank home loans
The loans in this table above include non-bank lenders and many small credit unions but exclude the Big Four banks and other major banks.
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Finding a good 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.
What is a non-bank lender?
A non-bank lender is an institution other than a bank that offers loan products to consumers. 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).
Banks and credit unions are regulated by the Banking Act and are listed by APRA as authorised deposit-taking institutions (you can see the full list of these institutions on APRA's website).
Non-bank lenders are privately owned and not mutual, typically relying on wholesale sources to get their funding. While non-bank lenders may not offer all the financial products that a bank does, many have a wide selection of products.
Non-bank lenders come in several forms, including:
- Online lenders
- Neobanks/digital banks
- Credit unions (while not called banks, credit unions are covered by identical regulations to banks)
These definitions can get quite technical and rarely matter to the ordinary borrower. Many digital lenders look like small non-banks but are actually owned by one of the Big Four banks. Some of Australia's newer neobanks, meanwhile, are independently owned companies that are in the process of gaining full banking licenses.
Can I get a lower rate with a smaller lender?
Usually, yes. A non-bank lender has more flexibility in the rates and fees on 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.
If you really want to get a sense of which rates are the lowest on the market now, check out our monthly rate tracker page. Non-bank lenders typically dominate the list of lowest rates each month.
List of non-bank lenders in Australia
Here is a list of many prominent small and non-bank lenders operating in Australia.
What happens if a non-bank lender goes bust?
You really don't need to worry too much about this. Non-bank lenders are governed by most of the same regulations as the banks. And while they certainly are more exposed to risks during a financial crisis you are still protected.
A non-bank lender can’t force you to pay your loan balance in full when they are in trouble. Similarly, if your lender went bankrupt you wouldn't magically escape your mortgage debt. You would need to keep repaying your loan. If your old lender gets bought up by a new lender then they will take charge of your mortgage but your existing loan contract will remain in effect.
Are there any disadvantages about using a non-bank lender?
The potential downsides of a non-bank lender are relatively small and might not apply to every lender.
- Fewer services. Many non-bank lenders offer only a handful of financial products, making it harder to do all your banking in one place.
- No physical branches. If you prefer to do your banking in person then a more traditional bank would probably be better for you.
- Fewer options. The larger banks offer a broad suite of mortgages that suit most borrowers. Non-bank lenders may have fewer options, and this can be harder if you're a self-employed borrower or have bad credit history.
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