Online home loans and lenders

Are online home loans safe?

Just because you haven't heard of a small online lender, doesn't mean they're unreliable. Many online banks, also known as neobanks, are owned or funded by a larger lender, and even the smallest lender is bound by Australian financial regulations.

If you are concerned, you can check that an individual lender has a Australian Credit Licence (ACL). Lenders should list their ACL number at the bottom of their webpage. This number can be cross-referenced with ASIC Connect's databases.

In the extremely unlikely event that an online lender closes up shop, your home loan is likely to be sold to another lender. This should have little to no effect on your repayments or overall loan, and the only change will be the company servicing your loan.

Learn more about online lenders

Here's a little more information about some of the online lenders in our table, including which organisations fund or support them, and the digital innovations they offer:

• 86 400. This online lender offers super-fast loan turnarounds and was bought by NAB in May 2021.
• Athena. This digital fintech lender offers low-rate mortgages and an entirely online service.
• Homestar. A 100% online lender, Homestar has been providing mortgages to Australian borrowers since 2004.
• ING. This online bank is part of the global, Dutch-based financial group of the same name.
• Loans.com.au. A Brisbane-based online lender, Loans.com.au is backed by Firstmac, Australia's largest non-bank lender.
• ME Bank. Member's Equity was established back in 1994 and went fully digital in 2012. It's owned by Bank of Queensland.
• Nano Home Loans. Nano is an online lender with low rates and a fast approval process, currently only available to refinancers.
• Tic:Toc. This startup boasts a fast online application tool, and they're backed by the Bendigo and Adelaide Bank.
• UBank. This entirely digital lender is backed by NAB, one of the nation's largest banks.

What are the benefits of using an online home loan lender?

• Lower rates. Because they don't have the overheads of operating branches, online lenders can pass their savings onto you in the form of much lower interest rates. Many online lenders also offer innovative products and have a wide product range to suit a variety of borrowers.
• Convenience. Online lenders also often have easy-to-use platforms that can help you speed through the application process. And with a heavy focus on tech development, they're often able to offer faster approvals than traditional lenders. They also offer the ease and convenience of completing the mortgage application process from home rather than having to visit a bank branch.
• Faster processing. Online lenders are innovating as a fast pace, and many of them offer super swift loan processing times – including the ability to assess, review and approve your home loan within hours.

Are there any downsides to going with a digital lender?

Some of the smaller online lenders aren't able to lend money for properties in regional areas.

In the mortgage world, rural areas are regarded as riskier security, and many online lenders don't have the size nor expertise to handle these types of loans. When purchasing a rural property, it is worth asking around for the lenders that permit home loans for regional areas.

Also, if you're uncomfortable with using the Internet for your banking, or you'd prefer face-to-face communication with your lender, then an online home loan probably isn't right for you.