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Non-bank home loan lenders in Australia

Non-bank lenders include specialised finance providers, entirely online lenders or digital startups. Non-bank lender home loans often have lower rates than products from major banks.

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Name Interest Rate p.a. Comparison Rate p.a. Fees Monthly Payment
Principal & Interest20% min. depositOwner-occupier
Interest Rate
5.99%
Comparison Rate
5.90%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$2,998
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Principal & Interest40% min. depositOwner-occupierOffset account
Interest Rate
6.15%
Comparison Rate
6.40%
Fees
Application: $0
Ongoing: $248 p.a.
Monthly Payment
$3,050
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Principal & Interest20% min. depositOwner-occupierOffset account$750k+
Interest Rate
6.44%
Comparison Rate
6.58%
Fees
Application: $300
Ongoing: $10 per month
Monthly Payment
$3,144
Principal & Interest 3Y Fixed30% min. depositOwner-occupier
Interest Rate
5.99%
Comparison Rate
6.13%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$2,998
Go to site

Speak to a broker about your options

Principal & Interest40% min. depositOwner-occupierOffset account$500k to $750k
Interest Rate
6.44%
Comparison Rate
6.58%
Fees
Application: $300
Ongoing: $10 per month
Monthly Payment
$3,144
Principal & Interest20% min. depositInvestment
Interest Rate
6.29%
Comparison Rate
6.20%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$3,095
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Principal & Interest10% min. depositInvestmentOffset account
Interest Rate
6.19%
Comparison Rate
6.58%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$3,063
Go to site
Principal & Interest 5Y Fixed20% min. depositOwner-occupierMIn $300k
Interest Rate
6.79%
Comparison Rate
6.74%
Fees
Application: $300
Ongoing: $10 per month
Monthly Payment
$3,260
Principal & Interest10% min. depositOwner-occupierOffset account
Interest Rate
5.99%
Comparison Rate
6.51%
Fees
Application: $0
Ongoing: $0 p.a.
Monthly Payment
$2,998
Go to site
Principal & Interest20% min. depositOwner-occupierOffset accountup to $500k
Interest Rate
6.44%
Comparison Rate
6.58%
Fees
Application: $300
Ongoing: $10 per month
Monthly Payment
$3,144
Principal & Interest 3Y Fixed20% min. depositOwner-occupierMIn $300k
Interest Rate
6.54%
Comparison Rate
6.61%
Fees
Application: $300
Ongoing: $10 per month
Monthly Payment
$3,177
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How to compare a non-bank lender

These basic home loan comparison tips are true for non-bank lenders and any other financial institution.

  • Interest rates. A lower interest rate will always save you money – but remember, it's not the most important thing to consider.
  • Loan type. What type of loan do you need? You can get a fixed rate home loan or a variable rate one. You can also consider an interest-only repayment option, but most borrowers go for principal-and-interest repayments.
  • Loan fees. Fees on home loans matter less than the interest rate, but it's always good to avoid more fees if you can.
  • Loan features. The ability to make extra repayments can help you get out of debt faster and pay less interest. However, not all loans allow this. An offset account is another useful feature that lets you save money in a bank account while also reducing your interest costs.

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 and therefore cannot hold your money in a bank account.

This doesn't mean they are less trustworthy. They are 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 the Australian Prudential Regulation Authority (APRA) as authorised deposit-taking institutions (ADIs). You can see the full list of these institutions on APRA's website.

How does a non-bank lender work?

Non-bank lenders are privately owned, 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 the following:

  • Online lenders. These companies are credit providers operating online, usually with cheap deals.
  • Fintech lenders. Similar to an online lender, but these types of home loan providers tend to emphasise their speed and ease of approval as well as their low rates.
  • Specialist lenders. Another type of non-bank is lenders with a specialised focus, such as lenders to older Australians or borrowers with bad credit.

What about credit unions?

Definitions here can be tricky. There are credit unions, building societies and similar customer-owned banks. Some of these institutions call themselves banks and are certainly APRA-regulated like the big banks. But these institutions are customer-owned, meaning they don't pay dividends to shareholders and reinvest profits to members and their local communities.

You can visit the Customer Owned Banking Association website to find a list of all its member institutions, some of which do call themselves banks.

Sometimes a non-bank is really just a bank

These definitions can get technical and rarely matter to the ordinary borrower. Many digital lenders look like small non-banks but are owned by one of the Big Four banks or another Australian retail bank. Some of Australia's newer neobanks are independently owned companies that don't call themselves banks but have banking licences or are in the process of gaining full banking licences.

Can I get a lower rate with a non-bank lender?

Borrowers have experienced rising interest rates over 2022 and 2023, so looking for a lower rate has become more important. Non-bank lenders are actually providing some of the most competitive rates as interest rates rise. They are more likely to have personalised interest rates that change relative to your risk as a borrower.

Online lenders in particular often have cheap deals. They have lower operating costs that allow 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 cheapest home loans page. Non-bank lenders typically dominate the list of lowest rates each month.

What are the advantages of a non-bank lender?

  • Competitive interest rates. Non-banks don't have the same overhead costs as banks and are able to pass on their savings in the form of lower interest rates.
  • Faster turnaround. Non-banks often have more digital processes. This means they can work through applications in a much faster time frame.
  • Complex lending situations. Also thanks to their less rigid digital processes, non-banks are able to assess a wider variety of borrowers, such as those who are self-employed, have had bad credit or have multiple jobs.
  • Personalised service. Because non-banks don't have the same big teams and processes, they can provide much more personalised customer service. They might not have physical branches but they will have other easy ways to get in touch.

Are there any disadvantages to using a non-bank lender?

The potential downsides of a non-bank lender are 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 if you have bad credit history.
  • No deposit guarantee. If a bank is regulated by APRA as an authorised deposit-taking institution, then a customer's savings are protected up to the value of $250,000 if the bank collapses. Non-bank lenders may not fall under this scheme, although some do because they are operating under the banking licence of a bigger bank. As a borrower, this doesn't affect you unless you have money in an offset account, which is essentially a form of savings.

What happens if a non-bank lender goes bust?

As a borrower, your lender going bankrupt wouldn't affect you too much. They've already lent you the money after all. 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 remains in effect.

Learn more: What happens if an online lender goes bust?

Finding a good loan from a non-bank lender

The basic home loan comparison tips are true for non-bank lenders and any other financial institution.

  • Get a low interest rate. A lower interest rate will always save you money.
  • Work out what loan type you need. You can get a fixed rate home loan or a variable rate one. You can also consider an interest-only repayment option, but most borrowers go for principal-and-interest repayments.
  • Don't forget to factor in loan fees. Fees on home loans matter less than the interest rate, but it's always good to avoid more fees if you can.
  • Find a loan with the features you need. The ability to make extra repayments can help you get out of debt faster and pay less interest. However, not all loans allow this. An offset account is another useful feature that lets you save money in a bank account while also reducing your interest costs.

List of non-bank lenders in Australia

Here is a list of many prominent small and non-bank lenders operating in Australia.

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Frequently asked questions about non-bank lenders

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19 Responses

    Default Gravatar
    MarkFebruary 13, 2023

    Hi Chris,
    I wish to buy a block of land its small but I like it and I can afford it and can pay it off in quick time, I lost my portfolio during the belated GFC and want to start again, is it possible ? Is there a non bank lender that will give people a break or are the big four banks in control of it all?
    Kind regards
    Mark

      AvatarFinder
      RichardFebruary 20, 2023Finder

      Hi Mark,

      It’s a tough one, and I can’t really give you a strong answer without knowing more about you (and even then, at Finder we can’t give personalised financial advice, just general information).

      I’d suggest talking to a mortgage broker, they can help borrowers in difficult or complicated situations.

      All the best,
      Richard

    Default Gravatar
    ChrisJuly 5, 2022

    I’m looking for a home loan to purchase my ex-wife’s share of our jointly-owned unit.

      AvatarFinder
      RichardJuly 9, 2022Finder

      Hi Chris,

      Several factors need to be considered when transferring someone’s share of a property. You can read our guide about this here as a reference.

      For lender options, you can check our home loan comparison page.

      It’s also worth seeking legal advice from a solicitor for help and to get personalised advice regarding your situation.

      Regards,
      Richard

    Default Gravatar
    PaulOctober 20, 2018

    Hi,

    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
      JeniOctober 26, 2018Finder

      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!

      Cheers,
      Jeni

    Default Gravatar
    RoseMarch 19, 2018

    Hi

    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
      JeniMarch 19, 2018Finder

      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!

      Cheers,
      Jeni

    Default Gravatar
    JennyJune 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!

      A 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 our page that lists home loans for pensioners.

      Try to speak to a mortgage broker as well. A mortgage broker is a professional who compares and helps you apply for home loans on your behalf. A good mortgage broker will give you personalized service all the way through to settlement.

      Hope this helps.

      Cheers,
      Jonathan

      Default Gravatar
      JennyJuly 1, 2017

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

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