Small, online lenders could bag Aussie borrowers another $40,000

Mozo has found that house hunters opting to borrow from small, non-bank lenders could have the edge on those sticking with the Big 4 banks.

Small, non-bank and online lenders consistently came out on top in Mozo’s Experts Choice Awards, with competitive rates and great features on their home loan products. Thanks to these low rates, Mozo has found that a homebuyer could borrow up to $40,558 more from one of the four Experts Choice Award winners than from a Big 4 bank.

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“We crunched the numbers on how much more you could potentially borrow with these rock-bottom rates and found it was 11% of the average cost of a first home, which could be a big help to a buyer struggling to get into the property market,” said Mozo Director Kirsty Lamont.

“Our top four winners are offering variable rates under 4% and these small, online and non-bank lenders have an average rate that is 0.67% lower than the Big 4’s average of 4.43%.”

Mozo’s top 4 Home Loan Experts Choice Award winners

Which lender?What did it win?
Newcastle PermanentHome Lender of the Year
Best Value Fixed Loan
Best Value Offset Home Loan
Best Value Home Loan Package
Best Value First Home Loan
Best Value Fixed Investor Loan
HomestarBest Value Variable Home Loan
Best Value Offset Home Loan
Best Value First Home Loan
Best Value Variable Investor Loan
UBankBest Value Variable Home Loan
Best Value Fixed Home Loan
Best Value Fixed Investor Loan
Illawarra Credit UnionBest Value Fixed Home Loan
Best Value Variable Investor Loan
Best Value Fixed Investor Loan

See the full list of winners on our Experts Choice Awards page.

According to Lamont, nearly 90 per cent of the most competitive loans in the mortgage market are from non-major lenders.

“And we’re not just talking about no frills, low rate loans – small, online and non-bank lenders also dominated the Mozo Experts Choice Awards package loans category, offering loans with all the bells and whistles,” she added.

Tips for finding the best home loan

1. Budget for potential rate rises. Variable rate home loans are generally tempting because they offer flexibility - but you also need to remember that this means the interest rate is subject to change. Make sure your budget can handle a potential rate increase by crunching the numbers with our rate change calculator.

2. Consider the fees. The interest rate is not the only factor affecting the cost of your home loan. When you choose a home loan deal, make sure to check the comparison rate, as this takes into account both the interest rate and fees to give you a more accurate idea of the potential cost of a home loan. For more info on how the comparison rate works, check out our guide, here.

3. Don't forget the features. One of the best ways to save on your home loan is by making use of the great flexible features on offer, like fee-free extra repayments or an offset account. Decide which features might be useful to you, and then make sure your home loan lender offers them. Or for a home loan with all the extra options, check out our full feature home loan comparison.

Ready to choose the perfect home loan for you? Head over to our home loan comparison to see some of the best rates on the market. And if you’re wondering just how much you can afford to borrow, check out our borrowing calculator before making the plunge.