Getting a home loan is a really big financial decision. With so many choices, picking the right lender can feel confusing. Online mortgage lenders are becoming more popular in Australia. Home buyers and owners getting new loans use them more. Online lenders often have lower rates and fees than big banks.
This guide compares the top online home loan companies in Australia. We’ll look at their interest rates, loan types, fees, and special features. Keep reading to learn how to pick the best online mortgage lender for what you need.
What Are the Benefits of an Online Mortgage?
Online lenders give home loans fully online without physical branches. Here are some of the main perks of getting a mortgage from an online company:
- Lower interest rates: Online lenders often have lower rates, saving you thousands over the loan’s lifetime.
- Lower fees: Online companies tend to have lower application and account fees.
- Quick online applications: You can apply and get pre-approved totally online without paperwork.
- Convenience: Manage your mortgage and make extra payments easily online
- More loan choices: Online lenders offer different loans, even for first-timers and the self-employed.
- Good customer service: Many have high-quality phone, email, or chat support.
While online lenders have lots of benefits, it’s still important to compare options from them and major banks when applying for a home loan.
Top 3 Online Mortgage Lenders in Australia
There are many online mortgage lenders to choose from in Australia. Here are some of the top options based on interest rates, fees, loan features, and more.
1. LenderOne
LenderOne is one of the largest non-bank lenders in Australia. They offer highly competitive rates and a wide range of home loan products, including:
- Variable-rate mortgages
- Fixed-rate mortgages
- Offset accounts
- Line of credit mortgages
- Low-documentation loans
Interest rates start at as low as 2.99% for owner-occupiers paying principal and interest. LenderOne has low annual fees of just $200 per year. They provide discounted interest rates if you bundle home and contents insurance with them.
2. LenderTwo
LenderTwo offers among the lowest interest rates in Australia, at just 2.89% for variable home loans. They have an easy online application process and provide access to mortgage calculators and other tools to compare loans.
Loan options from LenderTwo include:
- Variable and fixed-rate mortgages
- Principal plus interest and interest-only repayments
- Offset accounts and split loans
- Low-doc home loans
Establishment fees are around $395. There are no ongoing annual fees. Customer service is available 7 days a week by phone and email.
3. LenderThree
LenderThree offers highly competitive refinancing and mortgage rates, along with a fast online application process. Variable rates start at 2.84% for owner-occupiers.
In addition to standard variable and fixed-rate mortgages, LenderThree offers:
- Construction loans
- Investment property loans
- Car loans
- Debt consolidation loans
There are no application fees, and annual fees are just $180 per year. Their online portal makes it easy to manage your mortgage and payments.
Choosing the Best Online Lender for You
With so many online mortgage options, how do you choose the right lender for your needs? Here are some tips:
- Compare interest rates. Even small rate differences can add up to thousands over your loan term. Use mortgage calculators to estimate costs.
- Consider fees: Look at establishment fees, annual fees, and loan discharge fees when comparing lenders.
- Compare loan types. Not all lenders offer the same products. Compare to find a loan that suits you.
- Look for tools and resources. Find a lender that provides handy tools like mortgage calculators and financial guides.
- Check service and support. Review customer service ratings and availability before choosing a lender.
- Think long-term. Consider whether the lender can meet changing needs like refinancing or switching loan types.
- Get pre-approved: Applying and getting pre-approved helps compare actual loan offers side-by-side.
Focus first on interest rates and fees to shortlist the most affordable options. Then look deeper at loan features, resources, and customer service when making your final choice.
The Mortgage Process with an Online Lender
Wondering how getting a mortgage with an online lender works? Here is an overview of the process:
- You can begin the process online by using mortgage calculators and eligibility checkers.
- When you are ready to apply, you complete an online form with your personal and financial details.
- Upload required documents like pay stubs, bank statements, IDs, etc. to support the application.
- If approved, you will receive a pre-approval letter stating how much you can borrow.
- To take out the loan, you accept the offer and provide additional documents for full approval.
- A loan specialist helps guide you through the final steps to settlement and registering the mortgage.
- You can then manage ongoing payments and access statements through the lender’s online portal.
The entire application and approval process can take 1-2 weeks with an online lender. Having documents ready avoids delays.
Refinancing your mortgage online
Many homeowners look to refinance their mortgage when interest rates drop or their financial situation changes. Refinancing with an online lender can help you:
- Lower your interest rate and monthly payments.
- Consolidate other debts into your mortgage.
- Switch from a variable to a fixed interest rate.
- Access equity through cash-out refinancing.
- Change the length of your loan term.
The process for refinancing your mortgage with an online lender is similar to getting a new home loan:
- Start by using an online mortgage calculator to estimate potential savings from refinancing.
- Check current refinance rates and apply online to find lenders willing to refinance your mortgage.
- If your property has increased in value, you may qualify for a lower LVR and a better refinance rate.
- Provide bank statements, tax returns, and details of your existing loan when applying.
- There are often no refinancing fees if you refinance to the same or a lower loan amount.
- Settling the new loan can occur in as little as 30 days, allowing you to start saving on interest quickly.
Refinancing with an online lender can help maximize savings compared to refinancing with your existing bank.
Tips for Choosing the Best Online Mortgage
Finding the right online mortgage lender can take some research, but it is worth the effort. Here are our top tips:
- Shop around and compare quotes from multiple lenders, not just one.
- Consider smaller lenders as well as big brand names to find the best rates.
- Look beyond interest rates alone; also consider fees, features, and service.
- Use online mortgage calculators to estimate costs and savings.
- Check lender reviews and complaints before applying.
- Get pre-approved to see actual loan offers side-by-side.
- Make sure the lender offers the loan types and flexibility you need.
- Ask about discounts for bundling other products, like insurance.
- Understand the full costs—not just upfront fees but ongoing ones too.
- Select a lender that provides resources and support throughout the process.
Taking the time to find the right online mortgage for your needs can save you thousands over the lifetime of your loan. With lower rates and greater choice, online lenders make financing a home more accessible than ever.
Frequently Asked Questions About Online Mortgage Lenders
If you’re new to getting a mortgage online, you probably have some questions. Here are answers to some of the key FAQs:
Are online lenders safe to use?
Yes, reputable online lenders are regulated by ASIC and AFCA-like banks. Their loans are just as secure and safe.
How do interest rates and fees compare to banks?
Online lenders often offer lower interest rates and fees than major banks. But always compare options.
How long does loan approval take?
Pre-approval can take 1-2 days online. Full approval takes 1-2 weeks if you provide documents upfront.
Can I get mortgage advice from an online lender?
Most offer general guidance. For personal advice, you may want to also consult a mortgage broker.
What documents do I need to apply for?
Pay slips, tax returns, bank statements, ID, details of expenditures, and assets and liabilities
Can I manage my mortgage fully online?
Yes, you can access statements, make payments, set up direct debits, and more through an online portal.
What types of mortgages do online lenders offer?
Most offer a wide range, including variable and fixed rates, offset, low-doc, and lines of credit.
