Top 10 Boutique Home Loan Providers

Whether you're a first-time homebuyer, refinancing, or diving into property investment, securing your ideal home loan with competitive interest rates that you can afford makes a huge difference to your lifestyle and your mortgage stress levels.

Finding the right lender, and choosing the right home loan can be as daunting as finding the perfect property, given the multitude of options and lenders available. We've spoken to our brokers and curated a selection of their favourite boutique lenders for 2024 (so far). 

Best Boutique Home Lenders for April 2024:

1. Bendigo Bank Bendigo Bank prioritises personalised service, offering tailored solutions to meet your needs. This lender emphasises transparency and integrity, providing clear information about fees, charges, and repayment terms. Furthermore, Bendigo Bank is renowned for its community-focused approach, reinvesting profits back into local communities through various initiatives. They’re known for competitive interest rates and flexible loan terms and loan types. Along with ING Bank (also on this list), they’re also one of the most trusted banks in the country. For borrowers who value corporate social responsibility and supporting local causes, Bendigo Bank's ethos may resonate.

2. Gateway Bank Gateway Bank is a smallish customer-owned bank, focused on the needs of its members (i.e. you). With a range of flexible loan options and transparent terms, you can find a mortgage that suits your financial goals and lifestyle. Gateway Bank's emphasis on community support and social responsibility may appeal with individuals seeking a bank that aligns with their values. Customer-owned banks are known for trustworthiness.

3. Newcastle Permanent Newcastle Permanent is a mutual bank. This means it's member-run, putting profits back into services and value for customers. Borrowers can find options to suit their individual home buying or refinancing circumstances. Additionally, Newcastle Permanent's commitment to community involvement and ethical banking practices resonates with customers seeking a trustworthy financial institution. They’re particularly well-placed to help small business owners and those with properties based outside metropolitan postcodes.

4. HSBC HSBC's home loans offer a compelling choice for borrowers seeking competitive rates and flexible options. With a global reputation for financial stability and reliability, HSBC provides customers with access to a wide range of loan products tailored to diverse needs. Whether it's purchasing a new home, refinancing, or investing, HSBC offers solutions designed to meet individual requirements. Additionally, the digital banking platform enables seamless interaction and convenient management of your home loans. Coupled with its commitment to customer service and international expertise, HSBC stands as a trusted choice for those seeking quality home loan options. They’re particularly efficient with offshore real estate.

5. Heritage Bank Heritage Bank home loans offer a comprehensive suite of lending options. They’re a small, but well-established lender renowned for their customer-centric approach. They have some of the lowest interest rates around, and flexible terms, making homeownership more accessible. Their commitment to community values and local support sets them apart, fostering trust and loyalty among customers. Whether purchasing a new home, refinancing, or investing, Heritage Bank's worth a look.

6. Macquarie Bank Macquarie’s diverse range of products caters to various financial situations, whether purchasing a new home, refinancing, or investing in property. Known as the 'fifth' of 'The Big 5' banks, it's not the largest lender by number of loans - but that's only because the home loan division is dwarfed by its other divisions. It is without doubt, one of the most successful home loan lenders in the country, particularly for property investors working seriously towards their portfolio.

7. AMP Bank With a range of loan options including variable, fixed, and package loans, AMP provides solutions for first-time buyers, investors, and refinancers alike. Their online tools and resources streamline the application process, while dedicated support ensures a smooth experience from start to finish - plus their interest rates are competitive. AMP's commitment to transparency and customer satisfaction instil confidence in borrowers, backed by a trusted brand with a long-standing reputation in the financial industry. Whether buying a home or building wealth through property investment, AMP Bank provides reliable and tailored lending solutions.

8. ING Bank ING Bank home loans offer competitive rates, innovative features, and seamless digital experiences. With a focus on simplicity and efficiency, ING provides borrowers with easy-to-understand products and transparent terms. Their Orange Advantage Offset Home Loan allows customers to reduce interest payments with a 100% offset account, while their Fixed Rate Mortgage offers stability and peace of mind. ING's online application process is fast and user-friendly, supported by responsive customer service. As a trusted global bank, ING brings reliability and expertise to the home loan market, making it a popular choice for borrowers seeking value and convenience. They have some of the strictest lending criteria in the country, but their customer service is award-winning and along with Bendigo Bank, they’re one of the most trusted lenders in Australia.

9. Pepper Money Pepper Money caters to borrowers who may not meet traditional lending criteria,  offering loans for self-employed individuals, newer migrants, those with credit issues, or irregular income. Their range includes prime and specialist products, allowing borrowers to find a suitable solution in almost every case. Pepper Money's understanding approach and willingness to consider unique circumstances make them a preferred choice if you’re seeking an alternative to the mainstream lenders. With competitive rates and attentive customer service, Pepper Money aims to empower borrowers and help them achieve their homeownership goals, even in challenging situations.

Choosing the Right Mortgage for You:

Before diving into the world of homeownership, it’s important to decide what type of mortgage suits your needs and preferences. Whether you're planning to reside in the property or you want it as an investment, understanding the features and options available to you can make a significant difference in your financial journey.

What to look for when home loan shopping:

• Competitive interest rates: There’s no doubt a competitive interest rate is important when you’re looking for a new lender, and a new home loan. 

• Flexible loan terms: Whether you prefer a loan spanning 10 years or 30, it’s important to identify lenders with the right loan terms on offer for your financial future.

• Choice of loan types: Having the flexibility to fix some or all of your loan is a good option to keep up your sleeve in case sudden expenses crop up.

• Customised repayment options: Aligning your mortgage repayments to your pay cycle – weekly, fortnightly, or monthly – can help you pay off your loan faster.

• Offset accounts: An offset facility is one way to make the most of your savings on interest payments by linking it to your variable home loan account.

• Redraw facility: Making additional repayments into your home loan without paying extra might be a facility you want in your new home loan.

• Lump sum repayment options: Having the ability to make lump sum repayments empowers you to pay off your loan sooner in case of unexpected windfalls.

• Assistance with your deposit: There are lenders who will accept a lower deposit without insisting on Lender’s Mortgage insurance (LMI) if you meet other loan criteria. Saving a 20% deposit can prove challenging, so explore alternative options that enable you to secure a loan with a deposit as low as 5%, 10%, or 15%.

How do you choose the right home loan?

First, clarify your intention with the property: will you be living in it or seeking an investment opportunity? Are you a first-time buyer or a seasoned homeowner? These questions lay the groundwork for selecting the appropriate mortgage.

Lenders tailor their offerings based on various borrower profiles, recognising the distinct needs of first-time buyers, established homeowners, and property investors. Key considerations include: 

• interest rates, 

• loan terms ranging from 5 to 30 years, 

• fee structures, and 

• repayment options.

Is a fixed interest rate better than a variable one?

This depends on whether you prefer a little certainty over the chance of your rate falling. Variable interest rate loans, influenced by market fluctuations, offer flexibility but expose you to potential rate hikes. 

In contrast, fixed-rate mortgages provide stability by locking in a predetermined interest rate for a specified period, aiding your budget planning. For those seeking a balance of stability and flexibility, split-rate mortgages offer a hybrid solution, allowing borrowers to allocate portions of their loan to both fixed and variable rates. Careful consideration of loan features, interest rates, and any associated fees is paramount in finding a loan that suits you. Comparison rates give you an overview of your loan expenses, encompassing all the fees and charges. Sometimes a loan with a lower rate has a lot hidden in the additional fees and charges and this shows up in your comparison rate. Ways to maximise your loan structure including increasing your repayment frequency, avoiding as many fees as you can, and considering bonus features such as an offset account or redraw facility.

What type of loan can I get?

That’s very much up to you, your broker - and the lenders. There’s a loan for almost every financial situation, including specialised home loans, like:

1. Self-Employed Home Loans: For people with non-standard income documentation, who may not be able to fulfil conventional paperwork requirements.

2. Investment Property Loans: Designed for purchasing additional properties and building up a real estate portfolio, these loans accommodate various repayment structures, including interest-only options.

3. Construction Home Loans: Ideal for building or renovating properties, these loans release your funds in stages to align with project progress.

4. Line of Credit Home Loans: Leveraging your existing home equity, these loans provide flexible access to funds for investments or renovations.

5. Non-Conforming Home Loans: Serving borrowers with unique financial circumstances, these loans offer alternatives for individuals who don't meet standard eligibility criteria.

6. Bridging Loans: When you’ve bought a new home, but haven’t sold the old one yet, you’ll need one of these to - literally - bridge the time between when you may inadvertently need to pay two mortgages. Don’t worry! It doesn’t last long. These are short-term loans to bridge the gap during your buying and selling process.

7. Low deposit home loans: Your deposit influences your home loan eligibility and the overall cost of borrowing money. While lenders typically favour deposits representing 20% of the property value, options exist for lower deposits, subject to your lender’s criteria and additional costs like Lenders Mortgage Insurance (LMI).

Is it Hard to Get a Loan Approval?

It’s not as easy as it was in 2019/2020 but a good broker can make it easier on you. If you have bad credit or want to include your supplementary income sources like Centrelink payments, obtaining a loan approval is still possible, albeit challenging. Government incentives such as the First Home Owner Grant (FHOG) provide additional support, subject to specific eligibility criteria.

What’s the best home loan for me?

The best home loan for you depends on your unique circumstances, and with hundreds of products on the market, it's smart to research as many as you can and understand your options thoroughly - or ask an expert broker to do this for you.

Compare Club’s expert mortgage brokers have evaluated the mortgage fees, features, and interest rates to break down the award-winning boutique lenders we’re already working with in 2024.

Understanding stamp duty implications and leveraging online tools like calculators aid in financial planning and decision-making, empowering you on your homeownership journey.

SOURCES:

https://insync.com.au/insights/banks-must-rebuild-trust/

https://www.smh.com.au/business/small-banks-beat-big-four-for-satisfaction-20130930-2un09.html

https://www.roymorgan.com/findings/bendigo-bank-and-ing-are-australias-most-trusted-banks-while-nab-is-the-biggest-improver

https://www.adviservoice.com.au/2023/09/customer-owned-banks-as-a-group-are-the-most-trusted-banks-in-australia/

https://www.news.com.au/finance/business/banking/australians-placing-too-much-trust-in-big-4-banks-missing-out-on-savings/news-story/8f74cbc933ab50823e44350d3d731ba2

Anthony Stevenson, is the head of home loans at Compare Club. With over a decade of experience under his belt, Anthony is dedicated to helping individuals make informed decisions when choosing a home loan. Whether it's finding the best deals on your home loan or refinancing, Anthony has a wealth of knowledge in the space.

Meet our home loans expert, Anthony Stevenson

Anthony's top home loans tips

• 1

  Refinancing is the smartest, fastest way to lower your repayments and give yourself some breathing room.

• 2

  There’s more to a good value home loan than just interest rates. Are you paying high account keeping fees, or being charged for making extra repayments?

• 3

  Pre-approval and unconditional approval of your home loan are different parts of the same process. Our expert brokers cut through the jargon for you.

• 4

  Home loan pre-approval is not compulsory. It’s possible to begin your home loan application after you’ve found the home you want to buy.