Non Conforming Refinancing Home Loans

Refinancing to a non-conforming home loan

Rates and Fees verified correct on April 24th, 2017

Even if you have bad credit, there is still a way to save on your home loan

Refinancing can get you a competitive interest rate on your current mortgage or free up some extra cash, and while it can sometimes be more difficult for borrowers with bad credit, it is still a very feasible option with a specific non-conforming home loan.

Non-conforming home loan comparison

Rates last updated April 24th, 2017
Details Features
State Custodians
State Custodians
State Custodians have a range of home lending options for those who have some marks on their credit history. Must own a property or have at least 10% deposit.
  • They can help with refinancing, purchasing and debt consolidation
  • You must be employed or self-employed with steady income
  • Flexible terms and features
Enquire Now More info
ClickLoans is an online-only lender that offers home loans for both self-employed and PAYG borrowers who may have bad credit.
  • They can help with purchasing and refinancing
  • Can assist owner occupier and investment borrowers
  • Great features like 100% offset and unlimited extra repayments
Enquire Now More info
Pepper Home Loans
Pepper Home Loans
Pepper specialises in providing fair home loans to those who are credit impaired - from small defaults all the way up to discharged bankruptcies.
  • They can help with refinancing
  • They also cater to self-employed borrowers
  • Defaults and discharged bankruptcies considered
Enquire Now More info
Rates last updated April 24th, 2017
Loan purpose
Offset account
Loan type
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Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
Bank Of Queensland Low Doc Home Loan - Variable (Owner Occupier)
Buy your home even if you're self employed.
6.86% 7.05% $995 $10 monthly ($120 p.a.) 80% Enquire now
Pepper Money Easy Alt Doc Home Loan - LVR 65% to 70%
A competitive rate offered to low doc borrowers.
5.84% 6.25% $995 $15 monthly ($180 p.a.) 70% Enquire now
Pepper Money Easy Alt Doc Home Loan - LVR Up to 60%
Apply even with defaults, judgements and writs registered on your file greater than 36 months ago.
5.69% 6.06% $995 $15 monthly ($180 p.a.) 60% Enquire now
St.George Low Doc Home Loan - 3 Year Fixed (Owner Occupier, P&I)
A low doc home loan with redraw facility.
4.24% 5.32% $750 $12 monthly ($144 p.a.) 80% Enquire now
Pepper Money Advantage Alt Doc Home Loan - Standard LVR 70% to 75%
A competitive rate offered to those who are self-employed.
6.95% 7.42% $995 $15 monthly ($180 p.a.) 75% Enquire now
Adelaide Bank SmartDoc Fix Home Loan - 1 Year Fixed Rate (Owner Occupier)
A low doc loan with a fixed rate for one year and 100% offset account.
5.17% 5.45% $375 $15 monthly ($180 p.a.) 80% Enquire now
Pepper Money Easy Alt Doc Home Loan - LVR 70% to 75%
This loan accepts low doc borrowers who have defaults, judgements and writs on their credit file as long as they were lodged greater than 36 months ago.
6.05% 6.48% $995 $15 monthly ($180 p.a.) 75% Enquire now
Commonwealth Bank Standard Variable Home Loan - Owner Occupier (P&I)
Standard variable home loan with a low doc option for self-employed borrowers.
5.22% 5.36% $600 $8 monthly ($96 p.a.) 80% Enquire now
St.George Low Doc Home Loan - Variable Rate (Owner Occupier, P&I)
A competitive home loan product ideal for small business owners and self-employed borrowers features include redraw, full interest offset or partial interest offset, Deposit Protect Bond and more!
5.45% 5.65% $750 $12 monthly ($144 p.a.) 80% Enquire now
Adelaide Bank SmartDoc Plus Home Loan - Owner Occupier
A low doc home loan with 100% offset account and redraw facility.
5.39% 5.60% $375 $15 monthly ($180 p.a.) 70% Enquire now
Adelaide Bank SmartDoc Home Loan - Owner Occupier
Enjoy a low doc variable rate home loan with offset account.
5.25% 5.46% $375 $15 monthly ($180 p.a.) 80% Enquire now
4.59% 5.42% $355 $395 p.a. 82% Enquire now

What is a non-conforming home loan?

A non-conforming home loan will allow you to refinance your mortgage so that you can either decrease your total monthly payments or provide yourself with the lowest possible interest rate. These include bad credit home loans or debt consolidation home loans.

The good news is that this particular form of refinancing can even be accomplished by homeowners that have a poor credit history. For example, Pepper home loans still offer mortgages to those who have had any number of defaults or judgements registered 12 months prior to application, paid or unpaid with less than a months mortgage arrears within the previous 6 months.

It’s important to remember that your credit history does not mean you’ll rejected for every loan, there are a wide range of various lenders that can help you if have experienced unforeseen bankruptcies or foreclosures.

How a non-conforming home loan works

Your eligibility to refinance to a non-conforming loan is in part determined by your property’s current loan-to-value ratio , as lenders look at the existing equity you have. The more equity you have in your property, the less of a risk the lender will see you.

Most lenders will require that you have a minimum of 20% equity in your property. This means your LVR would be under 80%, which is the benchmark where lenders perceive you as less risky. Having equity of at least 20% will increase your chances of refinancing to a non-conforming lender.

Get your credit file in order

Before going through the process of applying for a loan with a non-conforming lender, you may want to consider repairing your credit history with a credit repair service. If successful, this opens up your loan options. It can also mean lower interest rates, as your risk is lower to a lender. If all else fails, you can talk to a mortgage broker. Mortgage brokers have industry knowledge to point your application at the right lender, and they're generally free to you because they'll receive a commission from your lender.

The different types of non-conforming home loans

It's important to know that there are different types of non-conforming home loans that you are able to refinance;

  • Bad credit home loan. This is generally for people that have a poor credit history, but still need to refinance their home. This type of home mortgage is based on a reliable income in addition to your credit history. The downfall to a bad credit mortgage is that the interest rates and fees can be much higher than a normal home loan.
  • Debt consolidation home loan. Similar to a bad debt loan, another viable option is a debt consolidation loan. A debt consolidation loan will allow you to combine all of your repayments for your existing debts into one lump sum. This can be beneficial because it will allow you to pay lower interest rates along with your monthly mortgage payments. A debt consolidation loan could also grant you more financial freedom as it will extend the amount of time that you are required to pay back the entire home loan, but you’ll end up paying more in interest so you’ll need to consider if this loan is right for you. If you have decided to refinance your non-conforming home loan, it's extremely important to perform the required research that will allow you to find the best options to fit your specific needs.

Comparing non-conforming home loans

When deciding on the best non-conforming home loan to fit your specific lifestyle, there are certain factors that will help determine which loan is best for you.

  • Interest rate. Bad credit home loans generally have a higher interest rate, which is why it’s so important to compare home loans to ensure you’re getting the best deal.
  • Comparison rate. Always check the comparison rate because it represents the true cost of your home loan. Since you’re already paying a higher interest rate, you don’t want to pay higher fees.
  • Fees. Another aspect to take into account is the amount of fees that you will have to pay. For instance, does the your potential loan provider have any hidden fees or are they upfront about their extra charges? It's crucial for you to know this information so that you won't be surprised with any additional expenses.
  • Repayments. When selecting the most appropriate lender you must be well versed in the loan repayment schedule. This will allow you to be more organised and know exactly when all of your monthly payments are due.

Pros and cons of non-conforming home loans

There are certain pros and cons that are associated with a non-conforming home loan.


  • Higher chance of obtaining a loan. You have a higher chance of obtaining home loan despite of your credit history. This can be very enticing to people that have been trying to find a mortgage provider, but have had no luck.
  • Being able to consolidate debts. You can roll credit cards, personal loans and more into your home loan with this type of loan, so you can save money on repayments and interest.


  • Higher interest rate. A big con about obtaining a non-conforming home loan is that you will potentially be faced with a higher interest rate.

What to avoid when dealing with a non-conforming home loan

While some non-conforming home loans are more beneficial than others, there are a few things that should be carefully considered first.

  • A line of credit. This allows you to access the equity in your home, so you will need discipline to not spend more than you can afford.
  • A credit card linked with your loan. You don’t want to be tempted to add any more debt when you already have bad credit.
  • Redraw facilities. Remember, the aim is to pay off your home loan as soon as possible - being able to access your funds will undo all your hard work.

Frequently asked questions about non-conforming home loans

Where can I find more information about bad credit home loans?

Please see our comparison of bad credit home loans.

Do you compare debt consolidation home loans?

Yes we do, please see our debt consolidation home loans page.

Who lends to people who have bad credit?

Lenders such as Aussie, Pepper Home Loans, State Custodians and Fox Symes can help.

Marc Terrano

A passionate publisher who loves to tell a story. Learning and teaching personal finance is his main lot at Talk to him to find out more about home loans.

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2 Responses to Refinancing to a non-conforming home loan

  1. Default Gravatar
    Deb | July 3, 2014

    Can Pepper home loans be trusted or are they shady, and people that buy into there schemes eventually loose there homes like years ago. Aussie mortgage brokers are trying to sell them of to us.. We were able to pay a 5% deposit but the 5% was not the bank balance 3 months ago so they say we don’t have an adequate savings plan. Oh and by the way the wages show that we are more than capable of making the repayments. What do we need to do to be recognised by someone reputable?

    • Staff
      Shirley | July 4, 2014

      Hi Deb,

      Thanks for your question.

      Generally lenders like to see a 20% deposit of genuine savings and a good credit history. You can compare alternative options on this page to see if you’re getting the best deal from Pepper/Aussie.


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