Borrowers abandon Big 4 for challenger banks

By Kirsty Lamont · · 3 min read
Fact Checked
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Home borrowers are walking away from the big 4 banks in favour of challenger and customer owned banks, according to the latest statistics from the banking regulator.

Successive rate cuts following close on the heels of the Royal Banking Commission have created the perfect storm for the big 4 banks, causing record numbers of borrowers to consider their options and take advantage of the incredibly competitive home loan rates currently on offer from challenger banks.

Borrowers are actively seeking out better value from banks with a customer first commitment, causing growth in home loans with challenger banks to outstrip loan growth with the big 4 over the past 12 months, APRA statistics* reveal.

So if you're considering switching to a bank that puts customers first, take a look at some of the most competitive home loans available from challenger banks right now.


TOP HOME LOANS FROM CHALLENGER BANKS

Suncorp - Back to Basics Special
  • 3.29% variable rate (3.30% comparison rate*)
  • No monthly account keeping or ongoing annual fees
  • $1,500 rebate special offer for refinancers - limited time only
Find out more
Our verdict

Proving that banks can offer great value, Suncorp is turning heads with this low rate home loan that saves you on fees as well. There are no ongoing fees or establishment fee on loans of $150,000 or more, plus you can make unlimited extra repayments and redraw as cashback. What's more, if you're refinancing and apply by 30 September, you'll be eligible to receive $1,500. You can apply online for pre-approval and book an appointment with a loan specialist.

Where do I get it? Head over to Suncorp to find out more >>

ME - Flexible Home Loan
  • 3.39% variable rate (3.83% comparison rate*)
  • 100% offset account and free redraw facility
  • Meet with a home loan specialist at a time and place that suits you
Find out more
Our verdict

Like the sound of a low rate home loan packed with flexible features like free redraw and a 100% offset account? Then you'll love the Flexible Home Loan package from challenger bank ME.  This great value home loan offers everything you'd expect from a bank for a small annual fee of $395, plus there's no valuation fees, fix or split loan fees or top up fees to worry about. Available for loans of $400K or more, with a 20% deposit.

Where do I get it? Head over to ME to find out more >>

HSBC - Discounted Home Value Loan
  • 3.27% variable rate (3.28% comparison rate*)
  • No upfront or ongoing fees
  • Borrow with just 10% deposit
Our verdict

HSBC has come out with a a great value home loan offer here, winning 2019 Mozo Experts Choice awards for Low Cost Home Loan and First Home Buyer Loan. Not only will you snag a great interest rate and pay no application or service fees, but you can also take advantage of features like free extra repayments, redraw and a split loan facility. Plus you'll get your own relationship manager to help you through the application process.

Where do I get it? Head over to HSBC to find out more >>

Bank of Queensland - Discount Fixed Rate
  • 2.99% fixed rate for 3 years (4.09% comparison rate*)
  • Make free additional repayments up to $5,000 a year
  • $1,000 cashback for first home buyers - limited time only

This killer home loan from BOQ lets borrowers lock in a sub 3.00% rate for 3 years. Owner occupiers can borrow with as little as 5% deposit and make free additional repayments up to $5,000 per year. This ripper deal is available for loans of $300K or more with a 20% deposit. And what's more, there's $1,000 cashback on offer to first home buyers who apply before August 31. Get in quick!

IMB Bank - Budget Home Loan
  • 3.36% variable rate (3.39% comparison rate*)
  • Unrestricted additional repayments and free redraw
  • Start with only 10% minimum deposit
Find out more
Our verdict

This budget home loan from mutual bank IMB offers everything you need to pay off your home loan faster. With a low variable interest rate for owner-occupiers and $0 application fee, this loan will start you off on the right foot. It also comes with flexible features such as unrestricted free extra repayments and free redraw via internet and mobile banking, as well as a split rate option.

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Want to compare more home loans? View the latest mortgage rates from over 80 lenders at Mozo's home loan comparison hub.

* APRA monthly banking statistics

* 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, loan amount and term entered. 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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