Last updated on 25th January 2022

Why are borrowers leaving the banks for boutique lenders?

Young couple receive letter from mortgage lender asking them to repay their home loans.


A recent study from Commonwealth Bank* revealed the Australian appetite for home-buying is at its highest in years.

But with more Aussies flocking to secure a home loan, application turnaround times for the Big 4 banks have skyrocketed**. 

Now savvy borrowers are turning to boutique – or non-major – lenders to make the dream of owning a home a reality or to get a better deal when refinancing.

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Lenders fall into two main camps: the Big 4 ‘major banks’ – CBA, Westpac, ANZ and NAB – and boutique lenders.

The Big 4 banks have the benefit of brand recognition and an established customer base. Traditionally, many borrowers saw major banks as lenders they could count on. 

But that’s quickly changing: a recent customer satisfaction survey shows customers of the Big 4 have some of the lowest levels of trust in their bank^.

Boutique lenders, on the other hand, are either smaller banks or non-bank lenders, which are lenders that only offer loans instead of other banking products like savings accounts. 

Although they’re smaller and may not be a household name, boutique lenders are subject to responsible credit-lending standards like the big banks. 

As such, we’re happy to include a number of them on our panel of 40+ lenders that our specialists review, in order to find Aussies a competitive home loan.

What are the benefits of boutique lenders?

To give the big banks a run for their money, boutique lenders are offering borrowers plenty to be happy about:

Lower rates & fees:
Boutique lenders often offer lower interest rates and fees than major banks because they don’t have to pay traditional overheads like the cost of maintaining branch networks.

Better borrowing experience:
Research from Roy Morgan shows customer satisfaction is consistently highest amongst boutique lenders§.

Flexible lending criteria:
Boutique lenders may be able to offer higher loan amounts and approve applications for people such as older or self-employed Aussies who’ve been rejected by a big bank.

Personalised service:
Because boutique lenders have a reputation to build, they often promote a more personalised level of service. This can include faster response times and tailored loan packages.

How do you choose a lender?

There’s more choice than ever when it comes to finding a lender, and deciding which one is best can be tricky. 

Whether you’re looking to buy a home or refinance, a Home Loans Australia specialist can walk you through your options from a panel of over 40 lenders and match you to a loan that fits your needs, deposit and budget. 

Our current lowest home loan rate is 1.79% (comparison rate 3.33%) – one of the lowest on the market. 

And with interest rates set to stay low for months, or even years, there’s never been a better time to secure a great value mortgage.

This article is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.

*Broker News, Desire For Aussies To Buy A New Home At Highest Level In Years, 17 March 2021
**Broker Pulse, New year sees lender turnaround times remain high, 23 June 2020
^Motley Fool, Big 4 banks own customers don’t trust them, 6 Nov 2020
§Roy Morgan, Home Loan Satisfaction Ratings, 15 Feb 2021