Digital and neobank home loans
Digital challenger banks are gearing up to give you more control of your mortgage, and maybe lower repayments too.
The rise of neobanks, also known as digital banks, has already threatened to disrupt the way Australians transact and save, and digital banks appear poised to make inroads into other areas of financial service. That includes home loans.
So what exactly are neobanks, and how might their home loans differ from those offered by traditional lenders?
Which digital lenders offer home loans?
Here are all the neobank and digital lenders we know have launched or are planning to launch mortgage products in Australia.
|Athena||Live||Athena's refinance mortgages for owner occupiers and investors are now live, and should be ready for new borrowers soon.|
|86 400||Coming soon||86 400 will work with mortgage brokers and their own call centre.|
|Xinja||Testing phase||There is very little public information at this stage, but Xinja is live with other products. They're currently testing their mortgage product to a limited base.|
|Revolut||Coming soon||We don't know much right now, but Revolut has been shaking up the mortgage market in the UK.|
|Volt||Testing phase||Volt has a full banking license, which is a major step. They haven't announced details about their mortgages yet.|
What is a neobank?
A neobank is an online-only bank that offers its services digitally, usually through an app, rather than with physical branches. Because these banks don't have the overhead cost of operating branches, they can generally offer better rates on savings and loan products.
While there are many online-only financial institutions, what sets neobanks apart is that they don't operate on legacy systems. In other words, the technology driving digital banks has been built from the ground up and doesn't rely on any existing processes.
What about other online banks?
The term neobank feels a bit like a marketing term. And it kind of is. Neobanks are selling themselves as something different from the traditional banks. They're challenging the traditional finance world using data, apps and a digital-first approach.
There are a few other online lenders who are really competing with the neobanks (or more correctly, against whom the neobanks will compete). These include:
- UBank. A digital-only brand owned by NAB, UBank is challenging traditional banks in the same way as neobanks.
- Tic:Toc. A recent mortgage innovator, Tic:Toc has the fastest online application process around plus the backing of a traditional lender.
- Loans.com.au. A completely digital lender, loans.com.au competes with low rate products and pride itself on personable phone and online service.
- ING. A traditional lender, ING has been online-first for a while and have a very popular app.
Find more online lenders and their mortgage products on our online lenders page.
How do neobank products differ?
Neobank products are driven by the technology that underpins their platforms. At present, most Australian neobanks offer transaction accounts, savings accounts and/or prepaid spending cards. Many neobank accounts also allow customers to hold multiple currencies.
The real point of differentiation for neobanks comes in how users interact with them. Neobanks typically tie their products to apps that provide detailed tracking of their savings and spending. The apps can also categorise spending so users know where their money is going. This will help give customers a clear overview of their finances. Many utilise AI to help build savings and budgeting goals for customers, and some tout their apps' seamless payment systems.
Compare online home loans in the table below
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How do I switch to a neobank?
At present, many neobanks may not be able to fully take the place of your main financial institution. If you want to access neobank products, you can compare them in the table below. Some neobank products are not yet available, but you can sign up for the bank's waitlist to be among the first alerted when the products launch.
Home Loan OffersImportant Information*
Online only cashback offer: Refinancers borrowing $250,000 or more can get a $4,000 cashback for their first application (Other terms, conditions and exclusions apply). Buyers and refinancers can get this competitive variable interest rate. Application fee waived for loans above $150,000.
Take advantage of a low-fee mortgage with a special interest rate of just 2.84% p.a. and a 2.84% p.a. comparison rate.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR<=90% Incl. LMI (Owner Occupier, P&I)
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000.
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