Home Loan Banks and Providers
When it comes to choosing a home loan provider there are literally hundreds of financial institutions in Australia offering mortgage products. Therefore it is not surprising that you would feel daunted by the prospect of choosing a home loan lender from such a range. One of the first decisions you will need to make when looking at the home loans from different lenders is the type of lender you would like to borrow from as you have the choice of:
- Home loans from the big banks.
- Second tier banks not part of the big four.
- Credit unions and building societies which are not publicly listed companies.
- Mortgage managers whose source their own funds to finance your home.
To help you decide on the home loan lender who can offer you the product which best suits your needs and the service which helps you best manage your mortgage, follow these simple processes to start your decision-making and then take a look at the providers below.
1. Decide how much you want to borrow
This isn’t about how much you are entitled to borrow according to your income, expenses and other debt, but instead you should decide what percentage of the value of the property you want to make your home that you are going to borrow. Of course the less you borrow the smaller your repayments but not everyone is in a position to make a 50% deposit on their home loan. Instead look at the value of repayments you are able to budget for in relation to the savings you have to put towards a deposit. Also decide how committed you want to be to your home loan and whether you would like to retain some leverage by having a loan which is significantly less than the value of your property.
It is important to have an idea of the percentage of the property value you want to borrow because every lender will have different lending options where some will allow you to borrow 100% of the amount you need to buy a home where others will require a 5% deposit and even more will require a 10% deposit.
2. Do you want a big bank?
The big four banks in Australia are Commonwealth Bank, Westpac, ANZ and NAB and all four offer a range of home loan products which can suit everyone from a first home buyer looking for an affordable loan, to a retiree looking for a reverse mortgage. You may also have your other transaction accounts with a big bank already and while home loan account is used and should be compared very differently from an everyday account if you feel you have a good relationship with your current bank you may want to maintain the relationship.
If you have found a big bank which you are happy with either through other banking dealings or through a trial called to their call centre or a visit to their branch, then you may want to compare the home loans based on the features offered and the affordability of the interest rates and fees. Just keep in mind that overall big banks tend to not perform as well in customer service and customer satisfaction surveys as compared to second-tier banks, and credit unions and building societies.
3. Are the smaller banks as safe?
Many second-tier banks, that is those not part of the big four or owned by any of the big four, are able to offer competitive features, fees and interest rates because they specialise in certain types of loans and have lower running costs. Smaller banks are also just as safe as the big banks because all financial institutions in Australia are regulated by independent government bodies and must be authorised to operate in the financial industry. You can also make your own comparisons of a smaller banks security and safety by considering its credit rating which you should find on its website.
4. Building society and credit union considerations
Where banks are publicly listed and have shareholders, building societies and credit unions are not. This means that instead of returning their profits to their shareholders as dividends in the way that the bank would, building society or credit union returns their profits to their members by being able to offer more affordable home loan products and lower interest rates. Building societies and credit unions are also run by the members who hold financial products with a financial institution and as a member you would be able to vote on the management of your lending institution while still having the choice of all of the popular home loan products and features.
5. The difference of a mortgage manager
A mortgage manager is another type of non-bank lender and they provide their own home loan products by independently sourcing their finance from Australian and international markets. As they build their finances themselves mortgage manager lenders are often able to offer you a lower interest rate on your home loan because they don’t have to deal with any ‘middlemen’. While mortgage manager lenders are relatively new on the home loan lending seen they are still required to be fully registered and remain independently regulated to ensure you are offered fair and affordable products.
6. Getting preapproval
Once you have decided on the lender you want to work with to make your dream home a reality it is best to seek preapproval in writing so that you know exactly how much you are able to borrow and how much that calculates as monthly repayments. Pre-approval will make the overall home loan application process much easier as you are afforded greater bargaining power when you have found the right home and will know your budget from the start. Getting your preapproval in writing should also secure you any special promotions your lender has on at the moment as well as any special offers discussed in your meeting with regards to fee waivers or additional features.
Your choice of lender is very important because a home loan is a long-term investment and you could conceivably be dealing with your chosen lender for the next 30 years, so for more information about Australia’s popular lenders and to find one that best meets your needs, take a look at each lender’s profile below.
Australia’s Top Home Loan Banks & Providers
American Express is easily one of the more recognisable financial brands anywhere in the world. Most people are very familiar with their credit card brand, but American Express, in association with AMP Banking, also offer a range of discount-rate home loans.
ANZ was awarded the 2011 Lender of the Year at the Australian Lending Awards by The Advisor and top research house, RFi Intelligence. ANZ Bank makes it easy for customers to apply for a home loan in their own time. Using the ANZ’s easy, secure online application form, customers are able to submit their application in their own time without the hassle of having to visit a branch. On the very next working day, an ANZ mortgage expert will call to discuss your loan options or package requirements and ensure you’re getting the right options to suit your personal needs.
The team of professional Aussie mortgage brokers are accredited and licensed to help you find the ideal mortgage to suit your specific needs based on your unique financial situation. They’ll compare hundreds of available mortgage products at no cost to you and work hard to find the best deal available. Aussie mortgage brokers will then do all the hard work of submitting your home loan application directly to the bank that best suits you, check the assessment process along the way and make sure settlement happens on time.
Established in 2003, Australian First Mortgage (also known as AFM) has won multiple awards and is currently one of the leading non-bank managers for mortgages in Australia. Funds are sourced from a group of the leading banks in Australia and from wholesale institutions. Australian First Mortgage is owned by three individuals that are key to the business itself and are currently full time directors.
If you are looking for a bank that sets itself apart from the rest of the crowd, especially in Victoria, then now is the time to get to know the Bank of Melbourne. Bank of Melbourne is, in every means of the word, your local bank because they are settled right here in Victoria with the main offices found right in Melbourne. They are committed to providing opportunities that will help the community to grow and prosper.
The Bank of Queensland is rated as one of Australia’s top 100 companies. Established in 1874, BoQ has finally reached a point where they have national influence, with branches and services in all areas of Australia.
Beat Home Loans are a non-bank lender actively working to Beat the rates offered by the major banks. They offer a targeted range of home loans with low interest rates, no application fees and no monthly fees.
Bank SA has more branches across metropolitan and rural South Australia than any other bank. The bank maintains a h3 focus on regional and rural home loan lending and aims at providing competitive mortgage products to all its customers. Bank SA is now a subsidiary of St.George Bank, which in turn is a subsidiary of Westpac, but Bank SA still maintains its own branches, operations and a h3 local presence in and around Adelaide.
Bankwest strive to offer customers a range of competitive home loans to suit your specific financial needs. Existing Bankwest customers are rewarded with discounted interest rates or even waived fees for remaining with the bank. New customers may find that the huge range of financial products available can be a little overwhelming, but that should be a good sign that you’ll be able to find the right home loan to suit you.
The Bendigo Bank maintains a community bank presence, with a majority of their 900 outlets and branches being community owned rather than company owned, so customer service has always been their primary focus. Since their merge with Adelaide Bank in 2007, the bank has focused on offering excellent financial products to customers all over Australia. Bendigo Bank was also the first bank in Australia to successfully introduce both Visa credit and Visa credit cards to customers. Adelaide Bank still maintains one of the only ‘reducing balance line of credit’ home loan products available anywhere on the Australian mortgage market.
Adelaide Bank was formed in 1994 from what was Australia’s largest building society at the time, the Co-Operative Building Society of South Australia Limited. One of Australia’s newer regional banks, Adelaide Bank has an asset base that exceeds $26 billion. Loan approvals from Adelaide Bank now represent 3% of Australia’s mortgage approvals, which is around $700 million per month. 75 per cent of these come from customers outside of South Australia.
Citibank is part of Citigroup, one of the largest finance companies in the world. In Australia, they’ve been doing business since 1985 when they were the first foreign bank given a banking license in Australia.
Commonwealth Bank is one of the Big Four Banks and customers can choose from a range of inclusive loan packages best suited to them. Spend some time comparing the available mortgage products available to see which one is right for you before applying.
Established in 1959, Community First is an Australian credit union that is owned and run by its members. This membership results in the credit union being able to offer lower interest rates, fairer fees and better service due to profits being reinvested back into the business rather than to shareholders.
CUA is proudly owned by its members, not its shareholders, so they work hard to provide members with good value banking products, including home loans. They offer competitive rates across its home loan range, complete with no monthly fees and no early repayment fees.
eChoice takes out all the hard work of comparing the hundreds of home loan products for you. They’ll assess your individual financial needs and goals and work with you to find the right mortgage to suit your own requirements. Based on your own financial situation, they’ll narrow down your home loan options to show you which banks will offer you the lowest interest rates, the best deals or the most flexible terms. Once you’ve located a loan to suit you, they’ll also assist you with setting up an appointment with your bank of choice. You’ll already know which home loan product to ask for and how to present your application for the best chance of success. The rest is up to you.
Fox Symes is a leading provider of home loans in Australia and a specialist in bad credit home loans and debt consolidation. Fox Symes offers a range of low cost home loans that are easy to understand and that cater to unique financial situations. If you have a bad credit history, your home loan is in arrears, you have credit card defaults, irregular income or too many debts, Fox Symes offers a range of low cost home loans to assist you.
Fox Symes is a subsidiary of FSA Group Limited, a public company listed on the Australian Securities Exchange. FSA Group Limited is Australia’s largest provider of debt solutions to individuals and businesses with a long track record of helping Australians during tough times.
GE Money was once one of Australia’s dominant non-conforming lenders, operating primarily through third-party channels, such as the broker network, and offering prime mortgages via its own broker franchise, Wizard Home Loans. However, in October 2008, GE Money made it clear that they would not continue to fund home loan products. Existing GE home loans were purchased and now managed by Commonwealth Bank.
Homestar Homeloans offer customers an opportunity to benefit from discounted interest rates on a range of mortgage products. Their competitive interest rates and low fees make them a clear favorite with many home loan customers. Homestar was awarded the non-bank lender of the year award for 2010 for the third year in a row.
HSBC are one of the largest banks in the world, but they really make an effort to reward customers for their continued loyalty and service. On the surface, their mortgage products look much like the offerings available from most other banks, but the sheer size and strength of this bank means they can offer discounts and some exclusive loan features that not many other lenders are able to match.
Insurance Australia Group (IAG) is one of the more respected insurance brands across three continents. This large insurance provider offers a diverse range of excellent personal and commercial insurance products.
IMB is one of Australia’s biggest building societies, offering a wide range of home loans to customers at very competitive rates. From the no-frills budget home loan, through to fully-featured mortgage packages that include other banking products, IMB actively tries to challenge the Big Banks and offer better value and service.
Establishment in 1994, Loan Market is Australia’s fastest growing retail mortgage brokerage with more than 600 mortgage brokers and staff across Australia and New Zealand. They have an extensive panel of lenders including every major residential, commercial and business bank and lender in Australia.
Macquarie is a global bank providing their customers with solutions in finances, advice, funds management, investment and banking. Since 1969 they have become a major player in world banking.
MECU is one of Australia’s larger, more successful credit unions. They pride themselves on offering customers socially responsible banking products and services. The range of home loans available offers competitive interest rates, full featured mortgages and no-frills mortgages.
Members Equity Bank Limited offers customers low rate, no-frills mortgages. The goal of Members Equity is to offer industry super-fund members far better value with regards to banking products.
The professional mortgage brokers at Mortgage Choice are experts in all things related to home loans. They understand how to uncover those ‘hidden’ mortgage products the banks don’t always advertise to regular customers and how to make sure you’re getting the best possible deal they can find to suit you. They don’t have their own mortgage products to sell, so you know their recommendations are completely unbiased. Their service to you is free of charge and a Mortgage Choice broker will be willing to meet with you at a time and place that is most convenient for you.
Mortgage House is one of the fastest growing non-bank lenders in Australia. They’ve gained recognition for providing a range of great value mortgage products, as well as striving to product products that are designed to suit the individual needs of customers.
MyRate is a non-bank lender and the recipient of multiple awards, funded by secure funds provided by one of the world’s largest banks. Customers can benefit from some of the lowest home loan interest rates in the country as well as enjoying no fees. Apply for your mortgage using their secure online application form and you could receive your preapproval instantly.
The National Australia Bank (NAB) is one of Australia’s Big Four Banks and strives to provide a huge range of highly customisable home loan products to suit any of their customers’ needs. The NAB home loan representatives are very happy to help customers tailor a mortgage to suit them, whether that be reducing fees and charges, finding a competitive interest rate or adding extra features to give a home loan greater flexibility.
RAMS Homeloans are a multi-award winning non-bank lender in their own right, despite being a subsidiary of Westpac. RAMS branches are independently run across Australia, and they provide a wide range of competitive home loan products designed to suit most customers’ needs. The Westpac backing serves as a h3 safeguard to customers that RAMS might be a non-bank lender, but it has the backing of a Big Bank behind it.
Launched in 2004, Refind Home Loans set out on the basis that it would build market share by refunding its customers a share of its commissions. To date, there has been over $5 million in total refunds transferred to its customers. Coming from humble roots as a small broker with little reputation in the industry, Refund is today positioned as the leading broker that is unaligned with a major bank.
State Custodians Mortgage Company
State Custodians Mortgage Company offer home loans at award-wining low rates. State Custodians were awarded the Money Magazine’s “Best Home Loan for First Home Buyers”, “Best Non-Bank Basic Variable Home Loan” and ” Best Non-Bank Line of Credit”. The people behind this competitive non-bank keep their costs down by allowing customers to operate their accounts directly via the Internet. Without the overheads of covering branch costs or paying commissions to third-party mortgage brokers, this allows customers to be rewarded with lower rates and charges.
St.George Bank have always had a long history of providing innovative, market-leading home loan products to customers. Offering the ability to tailor and customise mortgage packages to suit customer’s requirements, St.George Bank also allows customers with their own self-managed super funds to borrow money through their super to leverage their investment portfolios. St.George is a subsidiary of Westpac Bank, but maintains its own extensive branch and outlet network.
Suncorp Bank is a major player in Australia’s banking industry, listed in the Top 20 on ASX with more than $95 billion in assets. The employ about 16,000 people and serve more than 9 millions customers.
Super Rate are a direct lender and has been listed on the Australian Stock Exchange since its inception in 2007. This means they don’t have to cover the cost of branches or staff, which also means they can pass those savings onto the customer in the form of lower interest rates and cheaper fees. Existing customers can access their accounts using the secure online banking system. New customers can benefit from applying for their home loan online and receiving their preapproval in as little as 2 minutes.
UBank’s primary objective is to make life easier for its customers by providing a platform to make the most of their money. As growing numbers of people choose to do their banking online or over the phone, UBank designed its offering to combine these features with outstanding customer service and some of the market’s most competitive rates. Backed by the strength and global capabilities of National Australia Bank (NAB), UBank guarantees the safety of your deposits up to $1m under the Australian Government Deposit Guarantee. UBank’s home loan product, the UHomeLoan provides its customers with an incredibly low standard variable rate and a loyalty discount for the life of the loan.
Since 2003 Virgin Money has strived to offer customers a broad range of ultra-competitive financial products. These include credit cards, savings accounts, personal loans and home loans. Virgin Home Loans, through their partnership with eChoice Home Loans, actively assists customers to save time and money in finding the ideal home loan to suit them at no extra cost.
The Westpac Banking Corporation is one of Australia’s “Big Four Banks” and has a long
history of providing excellent financial products and advice to its customers. Their broad range of customisable home loan products can be tailored to suit customers’ banking needs, including packaging them with various other products, such as savings accounts, credit cards, margin loans and superannuation, to qualify the customer for discounts on home loan interest rates.
Wizard Home Loans
On the 27th of February 2009, Wizard Home Loans was sold to Aussie Home Loans. Previously, it was one of Australia’s leading non-bank lenders. Since the brand and national branch network was sold to Aussie Home Loans, the Wizard brand is no longer available to new customers, although existing customers still retain their accounts. These are now managed and owned by the Commonwealth Bank.
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