What’s the difference between home loan lenders?

The difference between home loan lenders

Should you choose a home loan from a bank, a credit union, a building society or a non-bank lender?

Banks, building societies, credit unions and non-bank lenders – they all offer home loans, but do you know what the difference is between these types of financial institutions?

It’s important to understand a lender’s approach to mortgages before you can work out whether it offers the most suitable home loan for you, so let’s take a closer look at what each type of lender offers to home loan borrowers.

Banks

Banks, particularly the “Big Four”(CommBank, Westpac, ANZ and NAB), are the major players in the Australian home loan market. In fact, around 50% of Australian mortgages are held with either CommBank or Westpac.

The vast majority of Australian banks are well-established financial institutions that offer a wide range of financial products, including everything from credit cards and transaction accounts to home loans. One of the main advantages of borrowing from a bank is ease of access, as it allows you to bundle a range of financial products together with the one institution. There’s also an added sense of security, as banks must abide by the Consumer Credit Code and are also regulated by the Australian Prudential Regulatory Authority (APRA).

However, you may be able to find better interest rates and lower fees elsewhere. You might not receive the same level of personalised customer service from a bank as you would from another lender.

Compare home loans from big four banks

Building societies and credit unions

Although building societies and credit unions are different to banks, they’re not classified as “non-bank lenders”. This is because, like banks, they are Authorised Deposit-taking Institutions (ADIs), and are regulated by APRA.

Unlike publicly-listed banks, which are run to generate profits for shareholders, building societies and credit unions are run for the benefit of their members. Rather than passing on profits to shareholders, building societies and credit unions aim to pass profits on to members in the form of better interest rates, lower fees and improved banking products.

Based on a mutual ownership or customer ownership structure, building societies and credit unions require you to become a member (usually for a nominal fee) when you take out a home loan. They generally offer a similarly broad range of home loans to the major banks, and they can often also provide lower interest rates, reduced fees and more personalised customer service than larger lenders.

Non-bank lenders

A non-bank lender is a lender that does not hold a banking licence. In other words, a non-bank lender offers home loans to consumers but it is not a bank, building society or credit union.

Non-bank lenders are privately owned financial institutions, which means they can generally offer competitive interest rates and fees when compared to the big banks. They have to abide by the Consumer Credit Code and their actions are overseen by the Australian Securities and Investments Commission (ASIC), so you can rest assured that it’s safe to borrow from a non-bank lender.

Non-bank lenders tend to have less strict lending criteria than major banks. They may also offer niche-market loans or mortgages that can be tailored to meet your specific requirements.

Compare home loans from non-banks lenders

Which lender is right for me?

The right lender and home loan for you really depends on your personal situation. You’ll need to consider your financial circumstances, borrowing requirements, desired loan features and a range of other factors so you can find a home loan that meets all your needs.

Start comparing home loans now

Rates last updated December 10th, 2018
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.79%
4.87%
$0
$395 p.a.
95%
Low deposit home loan. Enjoy flexible repayment options while paying limited fees.
3.98%
3.99%
$600
$0 p.a.
95%
Get a 1% discount for the first two years of your loan and pay no application or ongoing fees.
3.69%
4.86%
$0
$395 p.a.
90%
Special discounted rate for first home buyers. Start your home buying journey with 2 years of fixed repayments at a competitive rate plus package discounts. Available with a 10% deposit.
3.81%
3.85%
$0
$0 p.a.
80%
Get a low variable rate from a ANZ and save money with $0 application or ongoing fees.
3.87%
3.91%
$600
$0 p.a.
95%
A home loan with no ongoing fee and a redraw facility that you can borrow up to 95% LVR.
3.79%
3.80%
$0
$0 p.a.
95%
Get a sharp introductory rate to help you ease into home ownership. Refinance to this loan and you could get a $2,000 cashback.
3.75%
5.04%
$0
$395 p.a.
95%
This 2 year fixed ANZ Breakfree Package rate comes with package discount and product bundle. Terms and conditions, package fee and fees, charges & eligibility criteria apply.
3.89%
5.12%
$600
$8 monthly ($96 p.a.)
95%
A fixed rate home loan with additional repayment options.
3.89%
5.01%
$0
$395 p.a.
95%
Lock in a discounted rate for 3 years and have the option for interest only repayments. $2,000 cashback offer for eligible refinancers.
4.39%
4.78%
$0
$395 p.a.
95%
A low deposit package home loan. Combine your loan to get discounts on your interest rate and other NAB financial products.
3.89%
4.99%
$0
$395 p.a.
95%
Low deposit package loan with a range of discounts. Earn up to 500,000 Velocity Points to spend on flights, hotels and more.
3.90%
5.14%
$600
$10 monthly ($120 p.a.)
95%
Get a 2-year fixed rate with flexible repayment options to help you save.
4.17%
4.21%
$600
$0 p.a.
95%
Variable rate home loan from one of the big 4 banks. Available with just a 5% deposit.
3.89%
4.92%
$0
$395 p.a.
95%
A fixed rate loan with low ongoing fee and redraw facility.
4.15%
4.19%
$0
$0 p.a.
95%
Buy a home with just a 5% deposit and pay no application or ongoing fees.
5.24%
5.37%
$600
$8 monthly ($96 p.a.)
95%
Tailor your home loan to suit your needs. This product comes with a 100% offset account.
3.89%
4.92%
$0
$395 p.a.
95%
Competitive fixed rate package loan. For a limited time you can earn Velocity Points to spend on hotels and flights.
3.99%
5.02%
$0
$395 p.a.
95%
Pay no application fee and fix your interest for 3 years with this ANZ package home loan.
4.04%
5.15%
$600
$8 monthly ($96 p.a.)
95%
Lock in a competitive fixed rate for 3 years with one of the big 4 banks.

Compare up to 4 providers

Rates last updated December 10th, 2018
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.49%
3.52%
$500
$0 p.a.
95%
This mortgage combines a very sharp interest rate with a 100% offset account and it's available with a 5% deposit.
3.54%
3.58%
$0
$0 p.a.
80%
Get a competitive rate, save on fees and access a 100% offset account plus redraw facility. $900 cashback offer.
3.59%
3.58%
$0
$0 p.a.
80%
Apply online and get fast approval for this fixed rate, low-fee loan with redraw facilities. Add a 100% offset account for a small fee.
3.64%
3.66%
$0
$0 p.a.
80%
A simple mortgage with a competitive interest rate and no application or monthly fees. Borrow up to $2000000 from a convenient online lender.
3.59%
4.00%
$845
$350 p.a.
90%
Get a low variable interest rate and buy a property with just a 10% deposit. 100% offset account attached.
3.57%
3.58%
$0
$0 p.a.
80%
Get a very low interest rate and avoid big fees. Apply online for full approval in under 30 minutes and add a 100% offset account for $10 a month.
3.68%
3.70%
$0
$0 p.a.
80%
A competitive variable rate mortgage for owner occupiers that comes with a no fee debit card with a $5,000 limit.
3.70%
3.90%
$0
$0 p.a.
70%
Enjoy all the benefits of the Basic Home Loan and take advantage of an offset account.
3.89%
4.27%
$0
$395 p.a.
80%
New borrowers or refinancers can get a discounted rate with this package loan.
3.84%
3.85%
$0
$0 p.a.
90%
A flexible, basic mortgage for owner occupiers. Make extra repayments and take advantage of mortgage redraw facilities. Available with a 10% deposit.
3.68%
3.70%
$0
$0 p.a.
80%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
3.84%
3.84%
$0
$0 p.a.
80%
Pay no application or ongoing fees and get access to a free redraw facility with this innovative online lender.
3.72%
3.74%
$0
$0 p.a.
80%
Save on interest by taking advantage of a 100% offset account along with no ongoing fees or application fees.
3.84%
3.91%
$0
$0 p.a.
80%
Get instant online approval and flexible repayment options with this fixed rate mortgage for investing.
3.88%
3.89%
$0
$0 p.a.
90%
Save on interest with a free 100% offset account and buy your property with just a 10% deposit.
3.94%
4.95%
$595
$0 p.a.
95%
Borrow up to 95% LVR of the value of the property you're buying and pay no application or ongoing fees.
3.84%
3.82%
$0
$0 p.a.
80%
A fixed rate loan with free redraws, few ongoing fees. Apply online with a fast approval process.
3.89%
5.05%
$595
$0 p.a.
90%
Investors can take advantage of a short term fixed rate with no application or ongoing fees.
3.93%
3.94%
$0
$0 p.a.
80%
This investment loan keeps fees low, has a sharp interest rate and comes with a 100% offset account.
3.86%
3.86%
$0
$0 p.a.
95%
A two year fixed rate home loan with no annual or application fees.

Compare up to 4 providers

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UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers, P&I Borrowing over $200,000

Take advantage of a low-fee mortgage with a special interest rate of just 3.59% p.a. and a 3.59% p.a. comparison rate.

HSBC Home Value Loan - (Owner Occupier P&I)

Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online. Available with just a 10% deposit.

loans.com.au Essentials - Variable (Owner Occupier, P&I)

A competitive interest rate home loan with interest only options. Interest rate 3.64% p.a.
comp rate of 3.66% p.a.

Tic:Toc Live in Loan Variable Rate - Principal & Interest

Get a very low interest rate and avoid big fees. Apply online for full approval in under 30 minutes and add a 100% offset account for $10 a month.

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