Does it take long to get a home loan in 2021?

Home loans are approved much faster now in 2021, say the leaders of some of Australia's biggest banks. Music to the ears of many would-be borrowers eager to jump into the busy property market, undoubtedly.

Loan approval times were a talking point at the House of Representatives Standing Committee on Economics this month, where chief executives from big banks NAB, CBA, Westpac and ANZ highlighted both the heat in the current market and expectations of continued price growth this year. This analysis led to the committee's queries over delayed loan approvals, given many prospective buyers have been forced to sit on the sidelines, tied up by lender's red tape processes.

In recent years, home loan approvals have lagged due to a cautious approach by lenders toward some applicants, especially in light of findings made by the Hayne Royal Commission. Within this stringent process of the last few years, however, some lenders have delayed the process perhaps more than needed. These delays were raised by the committee amid a currently heated market, where timing can be crucial to making a property purchase.

With many people looking to buy right now, lenders now seem acutely aware of helping more buyers get into the action with an approved home loan. For example, ANZ Bank's chief, Shayne Elliot said during the hearings, "Pleasingly, our loans to first home buyers over the last three months are up 75% on last year and, across the industry, those getting into property for the first time are taking out 35% of owner occupier loans."

Meanwhile, NAB boss Ross McEwan told the committee that his bank could give a green light to a vanilla home loan in as little as 24 hours. Specifically, he said that 50% of simple loans are approved in less than a day and the other 50% in less than five days, as reported by The Australian Financial Review.

Getting a home loan approved - what are the steps?

Borrowing a large sum of money such as a home loan requires obvious vetting. For example, after receiving your home loan application, lenders will typically follow a few routine checks and, depending on the completeness of your documentation and your history with the lender, this can take a few days or weeks. These checkpoints can include contacting you to talk through your application and help you to find a lending arrangement that suits you, doing a credit check (using a credit reporting body) and getting a valuation on the property you want to secure.

So, if you are just starting your property search, a pre-approved home loan might be a smarter move. According to the government’s Moneysmart site, getting pre-approved ahead of time can help you get into the market when you're actually ready to buy. This is clearly useful in a busy market when it's likely that you'll need extra time to find an affordable option.

In the pre-approved scenario, a lender will notably ask for evidence of your current financial situation, debts and credit history to assess your ability to repay the loan. Pre-approval usually lasts for 3–6 months and shows you're eligible to apply for a loan up to a certain amount. Now it doesn't commit you to a loan but does tell sellers you're serious about buying. It also helps you set an affordable price range.

Realistic expectations about borrowing money

Certainly anyone looking at the housing market right should try to be realistic about what they can afford. Lending standards have been top of mind for the government and home loan lenders of late, but the application of such rules appears to be loosening in 2021. While this might give some prospective borrowers a better chance to enter the property market, the emphasis of responsibility now falls more squarely on mortgagees.

As a result, taking the time to get your finances in order is not only a more responsible approach but one that can set you up for a more efficient and safe buying experience once you step into the property frenzy.

You can start researching our top home loan rates below or visit our home loans hub for even more options.

Compare home loans - last updated 28 March 2024

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  • Offset Home Loan

    Package, Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.15% p.a. variable
    6.40% 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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  • Straight Up

    Obliterate, Owner Occupier, Principal & Interest, <50% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    6.24% p.a. variable
    6.24% p.a.

    Get a low variable rate depending on your deposit with Athena’s Straight Up Variable Home Loan. AcceleRATES feature helps you to reduce your home loan even faster (T&Cs apply). Zero fees to pay. Free redraw facility. Handy mobile app to manage your home loan.

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  • OMG Home Loan

    Owner Occupier, Principal & Interest, <60% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    5.99% p.a. variable
    6.00% p.a.

    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

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  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

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

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

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  • Mozo Expert Choice Badge
    Express Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate
    Initial monthly repayment
    6.01% p.a. variable
    6.14% p.a.

    Get fast online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

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* 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.

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