Online home loans and lenders

How we calculate Home Loan Finder Scores

Read full methodology

What different scores mean

9+

Excellent

These investment home loans offer low costs, coupled with a host of features, giving the best overall value.

7+

Great

These home loans may have slightly higher interest rates or fewer features but overall, a competitive offering.

5+

Standard

Usually the home loans would offer above average rates. They may still include some competitive features.

0+

Basic

Higher costs and/or fewer features.

What are online lenders?

An online lender will have its application and assessment process completely online. As a borrower you fill out an online form and upload your documents onto an online system. If you have a simple application it may also be assessed digitally, but they will also have the option for manual credit assessment too.

You can get online lenders that just offer you loans or you can get online banks, which also provide bank accounts. 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.

Are online home loans safe?

Just because you haven't heard of a small online lender, doesn't mean it's unreliable. Online lenders will need to meet the same criteria and have the same protections as even the biggest lender. In fact, some of the big lenders that you will have heard are online lenders which have been running for some time, like ING or ME Bank.

If you are concerned, you can check that an individual lender has an 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.

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

• Lower rates. Because they don't have the overhead 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. 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 at 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?

There are a few things worth noting if you're considering a digital lender.

• Location. 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 or 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.
• Not in person. 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.
• Vanilla loans. While it is improving, the speed and convenience of an online lender are typically only for those lenders who tick all the right boxes. If you're anything other than PAYG employed or you don't have a perfect credit score, even online lenders will still need more time to process your application.

Our expert says

"I got my home loan via an online lender. It was really fast and simple. I put in all my details online and quickly got a follow up email from the lender. Then I received some paperwork in the mail, which I had to sign and post off. A guy came to my door to verify my ID, which was an odd experience. That was the only offline part of it. The fact we were buying an established property in a big city made it easier (it's easy for the lender to value the property automatically). If my case was more complicated I probably would have called a mortgage broker. But I have no regrets about my online home loan experience."

Richard Whitten

Money Editor

How do I apply for an online home loan?

You'll usually find an online application form on the lender's website. Simply follow the steps to enter all your information. Often, the online lender will assess your application in real-time as you fill out the fields.

Online home loan applications require much of the same documentation as with any home loan lender. They will still want to know your income and expenses to make sure you can meet your repayments.

Documents you will need include the following:

• Proof of identity
• Income documents (e.g. payslips or business activity statements)
• Property details
• Bank statements

Some borrowers may need to provide additional information, such as self-employed borrowers or those with poorer credit scores – this can slow down the application process.

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:

• Athena. This digital fintech lender offers low-rate mortgages and an entirely online service.
• Unloan. This digital lender is owned by the Commonwealth Bank and offers fast loan applications for refinancers.
• 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.
• AMP. While AMP is a large, traditional financial services company its lending business is fully online.
• 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 the Bank of Queensland.
• Tiimely Home. This lender boasts a fast online application tool, and it's backed by the Bendigo and Adelaide Bank.
• UBank. This entirely digital lender is backed by NAB, one of the nation's largest banks.
• Yard. A 100% online lender with a wide range of home loan products.

Frequently asked questions about online home loans

• Are online home loans easier to get?

  Online home loans tend to be designed for easier application, but that doesn't mean it's easier for you to be approved. Online home loans still require you to meet strict lending criteria and have a deposit saved. An online home loan may make it easier to pull together documents and bank statements however, thanks to their automated processes.

• Are online home loans cheaper?

  Online home loans can in fact be cheaper than some of the loans from larger lenders with branches. Because online lenders don't need to spend money on the costs for physical branches or manual processing, they can pass the costs on to the customer. The interest rate you get will differ per loan and per borrower however so it's always worth comparing for your own situation.

• What is the best online home loan?

  As with any home loan or financial product there is no 'best one'. The best home loan for one borrower won't necessarily be the same best home loan for another. It depends on your strategy, the property you're buying and what you think is the most important when comparing loans.

What is Finder Score?

The Finder Score crunches 7,000 home loans across 120+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.

To provide a Score, we compare like-for-like loans. So if you're comparing the best home loans for cashback, you can see how each home loan stacks up against other home loans with the same borrower type, rate type and repayment type. We also take into consideration the amount of cashback offered when calculating the Score so you can tell if it's really worth it.

Read the full Finder Score breakdown

Written by

Richard Whitten

Money Editor

Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 607 Finder guides across topics including:

• Home loans
• Property
• Personal finance
• Money-saving tips