Why are borrowers leaving the banks for boutique lenders?
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.
Step 1: Select your State below.
Step 2: After answering a few questions, you will have the opportunity to compare competitive rates and could be eligible for significant savings.
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.
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 1.89% (comparison rate 2.94%) – 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.
Get Started Now:
Step 1: Select your State below.
Step 2: After answering a few questions, you will have the opportunity to compare quotes in your area and could be eligible for significant savings.
Territory Queensland South
Australia New South
Wales Victoria Tasmania Australian Capital
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