Online lender boom: How much can borrowers really save?


05 May 2021

Mortgage keyboard i stock image content

Online lenders are back with bang in 2021 thanks to record low rates and a booming property market, not to mention Australia’s bounce-back from last year’s Covid-driven economic woes.

A new Mozo survey reveals that consumer confidence in big bank alternatives is surging, with a whopping six in ten home borrowers now considering online lenders instead.*

Cheaper interest rates and fees are the main attraction for those considering online lenders, and they’re on the money. Mozo’s experts crunched the numbers on online lenders versus the big 4 banks and the results are eye-opening: on a typical $400,000 home loan, online lenders offer an average saving of $83,800 over 30 years.**

Whether you’re looking to save money on your mortgage by refinancing, buy an investment property or get your first home loan, there’s an online lender to suit. Here are the Mozo money editor's picks of some of the best in 2021...

TOP ONLINE HOME LOANS Smart Booster Home Loan
  • 1.85% discounted variable rate for 2 years

  • Rolls over to low ongoing 2.25% (2.21% comparison rate*)

  • Best Low Cost Home Loan: Mozo Experts Choice Awards 2021

The details:

Aussie owned has been taking on the banks with low rate online home loans since 2011, and the Smart Booster Home Loan is really getting borrowers switching. This headline-stealing loan is designed to help you boost your savings and get mortgage-free faster. Flexible features include unlimited free extra repayments, free redraw and an optional offset account for 0.10%. There are no monthly or annual fees and its available to borrowers with a 30% deposit for loans of up to $1 million.

UBank UHomeLoan
  • 1.85% fixed rate for 3 years (2.24% comparison rate*)

  • No ongoing fees + free extra repayments up to $20,000 p.a.

  • Mozo Experts Choice Award 2021 - Best Fixed Rate Home Loan

The details:

As one of Australia's top-rated online banks, UBank has our seal of approval when it comes to bringing Aussies top value on their home loans. Borrowers looking to lock in while rates are low can snap up this stellar 3-year fixed home loan now. It's available to owner occupiers with 20% deposit for loans of up to $2 million, and while there is an initial $395 application fee there are no other fees to worry about. UBank even lets customers make extra repayments towards the loan of up to $20k per year, for free!

Estimated savings: $98,473 over 30 years vs the average big 4 bank variable home loan**

Athena Celebrate Variable Home Loan
  • New 1.99% variable and comparison rate*

  • Zero Athena fees + free extra repayments and redraw

  • Available to borrowers with 40% deposit or equity

The details:

Online lender Athena is on a mission to save borrowers money on their mortgage, with some of the lowest rates in town. The fee-free Athena Celebrate Variable Home Loan offers the same great rates to both new and existing borrowers, and as an added reward your rate will drop lower as you pay down your home loan. It's available to refinancers and new borrowers purchasing in capital or major regional cities. Minimum LVR 60%.

Estimated savings: $115,092 over 30 years vs the average big 4 bank variable home loan**

Yard Variable Home Loan Special
  • 1.99% variable rate (2.02% comparison rate*) - Apply by 31 July

  • 100% offset account option + free extra repayments and redraw

  • Available to borrowers with 30% equity in their property

The details:

Looking for a home loan that could save you thousands without having to sacrifice flexible features like offset and redraw? Look no further than the variable home loan from competitive new online lender Yard. This online loan ticks all the boxes, with an ultra low rate for borrowers with a 70% LVR plus unlimited additional repayments, free redraw and a 100% offset account for an extra $10 a month. There is an $849 upfront fee but no ongoing fees, and the simple online application makes it easy to apply.

Estimated savings: $107,868 over 30 years vs the average big 4 bank variable home loan**

ING Fixed Rate Loan with Orange Advantage
  • 1.84% fixed rate for 3 years (3.73% comparison rate*)

  • No monthly, annual fee or transaction fees

  • Mozo Experts Choice Home Lender Bank of the Year

The details:

This 3-year fixed rate home loan  is chock-full of value, which is what you'd expect from Australia's most recommended bank and original online lender. With a competitive 3 year fixed rate, no ongoing fees, and the ability to make free extra repayments of up to $10,000 a year during the fixed term, it’s little wonder this loan took out a Mozo Experts Choice Best Fixed Home Loan Award 2021. 20% minimum deposit required.

Where to next: Head over to ING to find out more >>

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home loans Awards

* To read more about Mozo's 2021 Online Lenders Research Study, read our detailed report here.

**Savings correct at time of publication: 5 May 2021. Calculations based on a $400,000 owner occupier home loan using an 80% LVR for the average online lender savings estimate, savings estimate and uBank savings estimate. 70% LVR used for Athena and Yard estimates.

Want to compare more home loans? View the latest mortgage rates from over 80 lenders at Mozo's home loan comparison hub.

Calculate your home loan repayments

We can show you the monthly repayment amount for a range of loans

I want to borrow
for years