Want a cheaper home loan? Online lenders are where it’s at
Gone are the days when Aussies would only take out a home loan with a big bank. Now, there's no shortage of smaller online lenders offering some of the lowest rates in the market, which could potentially save you thousands over the life of your loan.
You might be wondering who these online lenders are and if they’re really trustworthy. That’s where our guide comes in. We’ll give you a full run-down of the kinds of lenders out there, and discuss just how much you could save by making the switch to an online lender.
RELATED: Home loan rate check - how do the big four banks compare?
Loan details
Repayment change if rates go up
Credit Unions, Mutuals, Non-Bank Lenders, what's the difference?
Before you sign up with an online lender you probably want to know exactly what they are about. Here’s a quick overview of the different players in the home loan market and who they would suit:
Lender type | Good for |
---|---|
Credit unions & Mutuals | Borrowers who want to be part of an organisation that gives back to members not just shareholders. |
Non-Bank & Online lender | Online-natives who want the sharpest rate and don’t mind a bit of DIY to get it. |
Small bank lender | Those looking for the security of borrowing from a bank but a more personal level of service and competitive rates. |
Big 4 bank | More complicated loans or large loan amounts, along with existing Big 4 customers who want all their banking in one place. |
Are online home loan lenders trustworthy?
There are lending benchmarks set by the Australian Securities and Investments Commission (ASIC) to which all lenders must adhere. These rules are aimed at protecting you as a borrower and include obligations like “acting efficiently honestly and fairly”.
When deciding if a home loan lender is trustworthy, you can get an idea by reading reviews from other customers at our rate and review section. Just keep in mind that every lender has
How much can an online lender save me?
Refinancing your current home loan to an online only lender could potentially save you thousands, as online lenders have fewer overheads than the majors and generally don’t have to pay dividends back to shareholders.
When we crunched the numbers we found a borrower could save $107,226* over the life of your loan by switching from the Big 4 variable average to an online lender - money that’s better off in your bank than theirs!
To give you an idea of how much you could save on your monthly repayments, here’s a comparison of average rates against four of the best in the Mozo database, using the example of a $400,000 home loan paid back over 20 years and our mortgage repayment calculator.
Home loan | Rate | Lender type | Monthly repayments |
---|---|---|---|
Avg variable | 3.48% p.a | N/A | $2,316 |
Avg Big 4 | 4.21% p.a. | Bank | $2,468 |
Reduce Home Loans Super Saver Variable | 1.99% p.a. (2.06% p.a. comparison rate*) |
Online | $2,022 |
Tic:Toc Variable Home Loan | 2.09% p.a. (2.10% p.a. comparison rate*) | Online | $2,041 |
Well Money Well Balanced Home Loan | 2.10% p.a. (2.13% p.a. comparison rate*) | Online | $2,043 |
Yard Variable Home Loan Special | 2.74% p.a. (2.76% p.a. comparison rate*) | Online | $2,167 |
Information accurate as of 22 June 2022.
As the table above shows, your ongoing repayments will be significantly lower if you go for one of the low rate deals under 3% currently available in the home loan market.
How do I find an online lender?
Online of course! Simply enter your details into our home loan comparison tool and our search engine will reveal some of the lowest rate and fee loans available in the market for your situation.
Is it difficult to apply for a home loan with an online lender?
Applying is easy, all you need is a few hours to gather all your documentation and get clicking. Some of the paperwork you’ll likely need includes:
- PAYG income verification
- Employer consent form
- Credit card and personal loan statements
- Bank and savings account statements
- ID documents
- Home loan statements for current loan
- Council rates notice or certificate of title
Keep in mind, the above documents are a general guide of what you may need to upload when refinancing to an online lender but you’ll need to check with the lender for specific requirements.
Keen on switching to lower interest rate? Compare low interest home loans below.
*Based on owner-occupier making principal and interest repayments for a home loan with an LVR < 80% and $400,000 remaining value. Averages sourced from the Mozo Marketview database.
Compare low interest home loans - last updated 27 April 2024
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
-
Mozo experts choice awards won:
- Exceptional Value Home Lender - 2024
Express Home Loan
Owner Occupier, Principal & Interest, LVR <90%
interest rate
comparison rate
Initial monthly repayment6.01% p.a. variable6.14% p.a.Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
CompareCompareExpress Home Loan
Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- interest rate
- 6.01% p.a. variable
- comparison rate
- 6.14% p.a.
- Upfront fees
- $134
- Ongoing fees
- $10.00 monthly
- Discharge Fee
- $350.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- yes
- Maximum loan to value ratio
- 90.00%
- minimum borrowing amount
- $5,000
- maximum borrowing amount
- $3,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Bendigo Bank Express Home Loan
-
Fixed Rate
Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment6.54% p.a.
fixed 2 years7.10% p.a.Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.
CompareCompareFixed Rate
Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.
- interest rate
- 6.59% p.a.
fixed 3 years
- comparison rate
- 7.06% p.a.
- interest rate
- 6.59% p.a.
fixed 3 years
- comparison rate
- 7.06% p.a.
- Upfront fees
- $160
- Ongoing fees
- $0.00
- Discharge Fee
- $160.00
- Extra repayments
- yes - free up to to lesser of 5% of original fixed loan amount, or $5,000 each year
- Redraw facility
- no
- Offset account
- Optional - $10 per month - 1 year fixed term only
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $20,000
- maximum borrowing amount
- -
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $3,000 cashback for eligible First Home Buyers, $2,000 cashback when you refinance loans of $250k+, apply from 1 Dec 2022, settle within 180 days.
Read our Mozo Review to learn more about the ANZ Fixed Rate
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Basic Home Loan
Owner Occupier, LVR<60%, Principal & Interest
interest rate
comparison rate
Initial monthly repayment6.14% p.a. variable6.16% p.a.Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
CompareCompareBasic Home Loan
Enjoy a low rate home loan with $0 application fee and $0 ongoing fees. Flexibility to split your loan and set different repayment types. Fee free redraw from your loan using online banking. Flexible ways to repay. 40% Deposit required.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- interest rate
- 6.14% p.a. variable
- comparison rate
- 6.16% p.a.
- Upfront fees
- $350
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 60.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Macquarie Basic Home Loan
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Fixed Rate Loan with Orange Advantage
Orange Advantage, Owner Occupiers, Principal & Interest, LVR <80%
interest rate
comparison rate
Initial monthly repayment6.09% p.a.
fixed 2 years6.16% p.a.Know exactly what your repayments will be, and you can fix your rate for up to 5 years. No monthly, annual fee or transaction fees. Free additional repayments (less than $10,000 p.a.). Valid for loans of $50,000 up to $2,000,000.
CompareCompareFixed Rate Loan with Orange Advantage
Know exactly what your repayments will be, and you can fix your rate for up to 5 years. No monthly, annual fee or transaction fees. Free additional repayments (less than $10,000 p.a.). Valid for loans of $50,000 up to $2,000,000.
- interest rate
- 5.99% p.a.
fixed 3 years
- comparison rate
- 6.12% p.a.
- interest rate
- 5.99% p.a.
fixed 3 years
- comparison rate
- 6.12% p.a.
- Upfront fees
- $299
- Ongoing fees
- $0.00
- Discharge Fee
- $250.00
- Extra repayments
- yes - free up to $10,000 pa
- Redraw facility
- no
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $2,000,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the ING Fixed Rate Loan with Orange Advantage
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* 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 $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. 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 Loan Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.