Guide to Non-Conforming Loans in Australia
Do you have a non-traditional income stream or a less-than-perfect credit history? You mig...
26 Apr, 2024
Anz, Westpac, Commbank, NAB Variable Home Loans
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.84% p.a. | 7.16% p.a. | $2,726 | Principal & Interest | Variable | $0 | $0 | 80% | |||||||||||
6.59% p.a. | 6.97% p.a. | $2,552 | Principal & Interest | Variable | $395 | $200 | 70% | |||||||||||
6.84% p.a. | 6.88% p.a. | $2,618 | Principal & Interest | Variable | $0 | $0 | 95% | |||||||||||
7.04% p.a. | 6.85% p.a. | $2,347 | Interest-only | Variable | $0 | $160 | 60% |
Important Information and Comparison Rate Warning
ANZ home loan rates
The table below displays a snapshot of ANZ’s variable-rate home loans for both investors and owner-occupiers. See our page on ANZ home loans for a look at some of its fixed-rate products too.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.84% p.a. | 7.16% p.a. | $2,726 | Principal & Interest | Variable | $0 | $0 | 80% | |||||||||||
6.59% p.a. | 6.97% p.a. | $2,552 | Principal & Interest | Variable | $395 | $200 | 70% | |||||||||||
6.84% p.a. | 6.88% p.a. | $2,618 | Principal & Interest | Variable | $0 | $0 | 95% | |||||||||||
7.04% p.a. | 6.85% p.a. | $2,347 | Interest-only | Variable | $0 | $160 | 60% |
Important Information and Comparison Rate Warning
Commonwealth Bank home loan rates
The table below displays a snapshot of CBA’s variable-rate home loans for both investors and owner-occupiers. See our page on CBA home loans for a look at some of its fixed-rate products too.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.84% p.a. | 7.16% p.a. | $2,726 | Principal & Interest | Variable | $0 | $0 | 80% | |||||||||||
6.59% p.a. | 6.97% p.a. | $2,552 | Principal & Interest | Variable | $395 | $200 | 70% | |||||||||||
6.84% p.a. | 6.88% p.a. | $2,618 | Principal & Interest | Variable | $0 | $0 | 95% | |||||||||||
7.04% p.a. | 6.85% p.a. | $2,347 | Interest-only | Variable | $0 | $160 | 60% |
Important Information and Comparison Rate Warning
NAB home loan rates
The table below displays a snapshot of NAB’s variable-rate home loans for both investors and owner-occupiers. See our page on NAB’s home loans for a look at some of its fixed-rate products too.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.59% p.a. | 6.82% p.a. | $2,552 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.59% p.a. | 6.83% p.a. | $2,552 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.69% p.a. | 6.86% p.a. | $2,578 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.74% p.a. | 6.86% p.a. | $2,592 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.74% p.a. | 7.07% p.a. | $2,592 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.74% p.a. | 7.18% p.a. | $2,247 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.74% p.a. | 7.10% p.a. | $2,592 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.79% p.a. | 6.87% p.a. | $2,605 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.84% p.a. | 6.88% p.a. | $2,618 | Principal & Interest | Variable | $0 | $0 | 95% | |||||||||||
6.84% p.a. | 6.96% p.a. | $2,280 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.84% p.a. | 6.99% p.a. | $2,280 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.84% p.a. | 7.08% p.a. | $2,618 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.89% p.a. | 7.34% p.a. | $2,297 | Interest-only | Fixed | $8 | $0 | 90% | |||||||||||
6.84% p.a. | 7.15% p.a. | $2,618 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.84% p.a. | 7.24% p.a. | $2,280 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.89% p.a. | 7.08% p.a. | $2,632 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.94% p.a. | 7.23% p.a. | $2,313 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.94% p.a. | 7.22% p.a. | $2,313 | Interest-only | Fixed | $8 | $0 | 90% | |||||||||||
6.99% p.a. | 7.29% p.a. | $2,330 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.99% p.a. | 7.40% p.a. | $2,330 | Interest-only | Fixed | $8 | $0 | 90% |
Important Information and Comparison Rate Warning
Westpac home loan rates
The table below displays a snapshot of Westpac’s variable-rate home loans for both investors and owner-occupiers. See our page on Westpac’s home loans for a look at some of its fixed-rate products too.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.59% p.a. | 6.82% p.a. | $2,552 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.59% p.a. | 6.83% p.a. | $2,552 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.69% p.a. | 6.86% p.a. | $2,578 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.74% p.a. | 6.86% p.a. | $2,592 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.74% p.a. | 7.07% p.a. | $2,592 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.74% p.a. | 7.18% p.a. | $2,247 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.74% p.a. | 7.10% p.a. | $2,592 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.79% p.a. | 6.87% p.a. | $2,605 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.84% p.a. | 6.88% p.a. | $2,618 | Principal & Interest | Variable | $0 | $0 | 95% | |||||||||||
6.84% p.a. | 6.96% p.a. | $2,280 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.84% p.a. | 6.99% p.a. | $2,280 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.84% p.a. | 7.08% p.a. | $2,618 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.89% p.a. | 7.34% p.a. | $2,297 | Interest-only | Fixed | $8 | $0 | 90% | |||||||||||
6.84% p.a. | 7.15% p.a. | $2,618 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.84% p.a. | 7.24% p.a. | $2,280 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.89% p.a. | 7.08% p.a. | $2,632 | Principal & Interest | Fixed | $8 | $0 | 70% | |||||||||||
6.94% p.a. | 7.23% p.a. | $2,313 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.94% p.a. | 7.22% p.a. | $2,313 | Interest-only | Fixed | $8 | $0 | 90% | |||||||||||
6.99% p.a. | 7.29% p.a. | $2,330 | Interest-only | Fixed | $8 | $0 | 70% | |||||||||||
6.99% p.a. | 7.40% p.a. | $2,330 | Interest-only | Fixed | $8 | $0 | 90% |
Important Information and Comparison Rate Warning
Who are the big four banks in Australia?
In Australia, the big four banks are ANZ, Commonwealth Bank, NAB, and Westpac. Collectively, they make up 93.5% of all home loans in Australia, with a $1.87 trillion share of the country’s near $2 trillion mortgage market according to EY analysis of big four bank 2022 half-year results.
ANZ
Owner-occupier home loans under management (April 2023): $183,338 billion
Investor home loans under management (April 2023): $92,784 billion
ANZ Bank, also known as Australia and New Zealand Bank, is one of the largest banks in Australia and New Zealand. Founded in 1835, it has a long history and a significant presence in the Asia-Pacific region. With $275 billion on its loan book, ANZ is the smallest of the big four.
Commonwealth Bank
Owner-occupier home loans under management (April 2023): $363,855 billion
Investor home loans under management (April 2023): $178,321 billion
Commonwealth Bank, also known as CommBank, is one of the largest banks in Australia and a leading provider of financial services. Established in 1911, it has a long history and a significant presence in the country's banking industry. With $541 billion on its loan book, Commbank is the biggest of the big four in terms of loans under management.
In 2022, CommBank launched Unloan, Australia’s first digital home loan with a discount that increases every year for up to 30 years. Bankwest is a subsidiary of CommBank.
NAB
Owner-occupier home loans under management (April 2023): $199,398 billion
Investor home loans under management (April 2023): $108,109 billion
NAB, short for National Australia Bank, is one of the largest banks in Australia. Established in 1982, it has a long-standing history and a significant presence in the country's financial sector. With $307 billion on its loan book, it is the third biggest home loan lender in Australia.
NAB owns digital lender UBank.
Westpac
Owner-occupier home loans under management (April 2023): $289,142 billion
Investor home loans under management (April 2023): $154,922 billion
Westpac is one of the largest banks in Australia and holds a significant position in the country's banking industry. Established in 1817, it has a long history and a strong presence in the financial sector. Westpac is the second biggest lender in Australia, with $443 billion on its loan book.
Westpac owns a number of smaller lenders including RAMS, St. George, BankSA, and Bank of Melbourne.
How do the big four banks compare to other lenders?
While the big four banks hold most of the market share in Australia, they’re not necessarily known for offering the most competitive interest rates or products. This is why it’s always important to shop around and compare lenders.
Besides the big four banks, alternatives include:
Customer-owned banks: Also referred to as mutual banks, customer-owned banks operate with the intention of providing banking services to their customers and are less focused on generating a profit. Credit unions also fall under the customer-owned bank umbrella. Many customer-owned banks provide their banking services to residents of a local area (eg. Illawarra Credit Union) or to those who work in a specific profession (eg. Teachers Mutual Bank), though many also accept members of the general public.
Other retail banks: The big four and their subsidiaries control most of the home loan market, but there are a number of other banks that have billions of loans under management including Bendigo Bank, AMP, Macquarie, Bank of Queensland, etc.
Non-bank lenders: Non-bank lenders are relatively new players in the banking space but generally have some of the most competitive deals as they don’t have physical branches, so can pass these savings onto the consumer. Non-bank lenders are not authorised deposit-taking institutions (ADI) so cannot offer savings accounts, term deposits, offset accounts, or transaction accounts.
Pros and cons of a big four bank home loan
Many Australians already bank with the big four or their subsidiaries, so taking out a home loan with them is the straightforward next step. The big four banks also have a long and solid history, so many Australians feel comfortable placing their trust in these institutions.
However, the big four don’t always necessarily offer the most competitive deals. Depending on what you’re looking for, you may be better suited with another lender. Here are some of the pros and cons of taking out a home loan with the big four banks.
Pros
Product range. The big four banks have a much wider range of products than smaller lenders. The big banks rely on customers who already have a savings account or other financial product/s with them to automatically take out other financial products with them too, rather than doing their own research into smaller lenders. The big four also offer more package products that provide discounts for people who bundle products into one package with the same bank, again making it more convenient for people who already bank with them to continue doing so.
Lending requirements. The big four banks generally have more lenient lending requirements than some of the smaller banks, which can be stricter about who they lend to. The big four have borrowing options for those who may struggle to get a loan elsewhere (eg. low doc loans, low deposit loans)
Service. The big four have a huge number of branches and ATMs all around the country, making it incredibly easy for those who need to go into a physical bank to deposit or withdraw money. If you prefer in-person banking or have a need for doing so like depositing large sums of cash, a big four bank may be for you.
Stability. Because the big four banks are the oldest and biggest lenders, they have built up a strong, reliable reputation. Like all banks in Australia, they’re backed by the Financial Claims Scheme, which is a government-backed safety net for deposits of up to $250,000 per account holder. However, it’s important to keep in mind that all Australian lenders are very heavily regulated so this shouldn’t be too much of a concern.
Cons
Less competitive. Because the big four dominate the market, they have less incentive to offer competitive products. They also have higher overhead costs too, which means they tend to have higher rates on basic home loan products and can charge more fees.
Technology and customer service. The big four have good banking apps (e.g. CommBank has the #1 banking app in Australia), however neobanks and some online lenders are known for having better apps and tools. The bigger banks can be slower to innovate in this regard, though the gap is narrowing. Customer service can also be less personalised with the bigger banks.
Are the big four banks safer?
The big four banks are all authorised deposit-taking institutions (ADIs) which means they are covered by the FCS. However, so are many other smaller banks.
In the extremely unlikely event a bank collapses, if it is covered by the FCS, account holders' money is protected (up to $250,000). To find out if your bank is an ADI, you can view the full list of banks that are covered under the scheme on the APRA website.
Beyond the FCS, there is another layer of protection known as depositor preference.
According to the RBA: “Deposits above the cap in Australian ADIs also benefit from depositor preference. This means that Australian depositors have a priority claim on the assets of a failed ADI ahead of other unsecured creditors, after the Government has been reimbursed for any amounts paid under, and expenses incurred in relation to, the FCS”.
This means that if an Australian bank collapses, APRA gets first preference over the bank’s assets to recover amounts paid out to depositors under the FCS (the $250,000 guarantee) and other expenses incurred in operating the FCS.
After APRA, the failed bank’s remaining assets in Australia must then be used to repay any deposits in Australia above the $250,000 cap before they can be used to repay other unsecured creditors.
What’s more, all licensed banks are also regulated by the Australian Prudential Regulatory Authority (APRA) and the Australian Securities and Investments Commission (ASIC).
So in short, yes the big four banks are safe - but smaller banks are equally as safe due to how heavily the banking sector is regulated.
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