The big banks are feeling the heat in the wake of the royal banking commission, with borrowers switching to online and challenger lenders and deserting the big four in droves.
New research from Mozo shows that borrowers are more open to online lenders than ever, with the lower rates and fees on offer viewed as the biggest benefit of applying for a loan online. What's more, online lenders are taking advantage of the nation's disgust with the big banks by cutting rates and launching new ultra low rate loans guaranteed to get even more borrowers switching.
So if you're looking for a more flexible way to borrow at a low rate, check out these great value home loan and business loan options from rival lenders:
BANK BEATING HOME LOANS
loans.com.au Smart Home Loan 80
3.03% variable rate (3.05% comparison rate*)
No application or ongoing fees
Unlimited free extra repayments and redraw facility
Loans.com.au is a popular online lender offering some of the lowest rates around. The brand new Smart Home Loan comes with a super sharp variable interest rate, no application or ongoing service fees and heaps of helpful features like free extra repayments, a redraw facility plus the option to split your loan between fixed and variable rates. It's no wonder loans.com.au is a perennial Mozo Experts Choice Award winner for best value home loans!
UBank is another online lender proving popular with Aussie borrowers for super low home loan rates, not to mention the fact that it's actually backed by NAB. The UHomeLoan Discount Offer comes with no annual or application fees plus flexible features like the option to split between fixed and variable rates, make free extra repayments, access a free redraw facility and choose weekly, fortnightly or monthly repayments to fit your budget.
The new Athena Variable Home Loan is a competitive refinance mortgage with a 3.09% variable rate (3.05% comparison rate*) and no application, valuation or ongoing fees. But don’t think the value ends there, the loan also offers free extra repayments and a free redraw facility. Just keep in mind, if you’re a first home buyer, you won’t be able to get this loan as it’s only for refinancers, living in capital or major regional cities.
Unrestricted extra repayments and free online redraw
No monthly or ongoing account fees
Homestar has been providing affordable home loans since 2004 and has really stepped up the big bank challenge in a big way with the popular Star Essentials loan. With a number of handy features - including unrestricted extra repayments and free online redraws - plus an ultra low variable rate, this wallet friendly loan gives owner occupiers plenty to get excited about.
With an all online and hassle free application process, Moula is set up to help Aussie businesses get the funding they need, when they need it. No fees and competitive interest on this loan keeps your business costs low and if you’re applying for a loan up to $500,000 you can be approved in as little as 24 hours. Just keep in mind that to be eligible for this one, you need to have been operating for at least 6 months, have an ABN or ACN, and turnover at least $5,000 each month.
Prospa is Australia’s leading online lender to small business, offering fast and flexible loans for any business purpose. This innovative Australian-owned lender focuses on removing the obstacles that have made it difficult for SMEs to access funding. A director’s guarantee is all that’s required as security, so there’s no need to put your house on the line. What’s more, Prospa assesses creditworthiness based on the health of the business, not the owner’s personal credit score.
*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 the amount and term you entered.
**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. 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.