Sign up for our FREE 8-week course to get on the property ladder.
Are online home loans safe?
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.
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.
How do I apply for an online home loan?
Unsurprisingly, applying for a home loan with an online lender is done online. You will 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.
- Nano Home Loans. Nano is an online lender with low rates and a fast approval process, currently only available to refinancers.
- Tic:Toc. 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.
Why you can trust Finder's home loan experts
More guides on Finder
The best standing desk in Australia: Our top choice of the year
If you're looking for a standing desk for the home office, the Omnidesk Ascent is our #1 choice for 2023.
Fast NBN plans are now cheaper. Is it worth switching?
It's time to sort out your NBN plan for the new year.
Save $1,583 a year by using index funds instead of active trading | Dollar Saver tip #60
Invest in an index fund instead of actively trading stocks and you not only save on time and fees, you could be earning more in returns too.
5 perks you can score by upgrading your internet this year
SPONSORED: Upgrade your internet before the end of 2023 and get ahead on your life admin! We take a look at some of the benefits of a faster internet connection.
Aussies are struggling to save money, and Gen Z blame themselves
Young Australians cite overspending as the main reason for not reaching their financial goals.
Shein IPO: How to invest in the Shein IPO
What you need to know about investing in Shein from Australia.
Best places to exchange currency in Brisbane
Your guide to currency exchange in Brisbane, including how to get the best exchange rate.
Waiting for rates to fall? Don’t bank on it, says ANZ CEO
Addressing speculation that interest rates might fall in late-2024, ANZ CEO Shayne Elliott said he thought it was too optimistic.
Find the right home loan now
Ask an Expert