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Want a cheaper home loan? Online lenders are where it’s at

Collage of people in different houses comparing home loan interest rates.

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

Rate change

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 May 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
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    Package, Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.39% p.a.

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

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    interest rate
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    Initial monthly repayment
    5.99% p.a. variable
    6.01% p.a.

    A low rate home loan for owner-occupiers packed with great features including unlimited extra repayments, free online redraw, no application or monthly admin fees. Rate will vary depending on LVR. Winner of a Mozo Experts Choice 2024 Low Cost Home Loan Award^

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    Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.54% p.a.
    fixed 2 years
    7.10% 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.

  • Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.16% 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.

Evlin DuBose
Evlin DuBose
Senior Money Writer

Evlin is RG146 certified for Generic Knowledge and has become a leading voice in finance news since joining Mozo two years ago. She is regularly featured in Google's Top Stories alongside major publications like and Yahoo Finance, and seasoned journalists. Despite being in the industry for just two years, she is Mozo's go-to writer for all things RBA and her research has been referenced by the Victorian Government. With a Bachelor of Communications degree from UTS, where she won the Dean's Merit Award and acted as the Director of Student Publications.

* 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

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