low doc

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Advertised Rate

3.39%

Variable

Comparison Rate*

3.59%

Company
Pepper
Repayment

$1,484

monthly

Features
Redraw facility
Offset Account
Borrow up to 85%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.03

/ 5
Go to site
More details
Advertised Rate

3.62%

Variable

Comparison Rate*

3.56%

Company
Resimac
Repayment

$905

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.78

/ 5
Go to site
More details
Advertised Rate

4.02%

Variable

Comparison Rate*

3.96%

Company
Resimac
Repayment

$1,005

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.78

/ 5
Go to site
More details
Advertised Rate

4.05%

Variable

Comparison Rate*

4.11%

Company
RESI Mortgage Corp
Repayment

$1,013

monthly

Features
Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.95

/ 5
Go to site
More details
Advertised Rate

4.05%

Variable

Comparison Rate*

4.11%

Company
Yellow Brick Road
Repayment

$1,013

monthly

Features
Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.95

/ 5
Go to site
More details
Advertised Rate

4.25%

Variable

Comparison Rate*

4.31%

Company
RESI Mortgage Corp
Repayment

$1,063

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.95

/ 5
Go to site
More details
Advertised Rate

4.25%

Variable

Comparison Rate*

4.31%

Company
Yellow Brick Road
Repayment

$1,063

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.95

/ 5
Go to site
More details
Advertised Rate

3.92%

Variable

Comparison Rate*

3.86%

Company
Resimac
Repayment

$980

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.78

/ 5
Go to site
More details
Advertised Rate

4.10%

Variable

Comparison Rate*

4.16%

Company
RESI Mortgage Corp
Repayment

$1,025

monthly

Features
Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.95

/ 5
Go to site
More details
Advertised Rate

4.10%

Variable

Comparison Rate*

4.16%

Company
Yellow Brick Road
Repayment

$1,025

monthly

Features
Redraw facility
Offset Account
Borrow up to 60%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.95

/ 5
Go to site
More details
Advertised Rate

4.32%

Variable

Comparison Rate*

4.26%

Company
Resimac
Repayment

$1,080

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.78

/ 5
Go to site
More details
Advertised Rate

4.50%

Variable

Comparison Rate*

4.56%

Company
RESI Mortgage Corp
Repayment

$1,125

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.95

/ 5
Go to site
More details
Advertised Rate

4.50%

Variable

Comparison Rate*

4.56%

Company
Yellow Brick Road
Repayment

$1,125

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.95

/ 5
Go to site
More details
Advertised Rate

4.47%

Variable

Comparison Rate*

4.65%

Company
AlphaBeta Money
Repayment

$1,118

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.84

/ 5
Go to site
More details
Advertised Rate

2.85%

Variable

Comparison Rate*

3.05%

Company
Pepper
Repayment

$1,399

monthly

Features
Redraw facility
Offset Account
Borrow up to 65%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.49

/ 5
Go to site
More details
Advertised Rate

2.85%

Variable

Comparison Rate*

3.05%

Company
Pepper
Repayment

$1,399

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.49

/ 5
Go to site
More details
Advertised Rate

2.99%

Variable

Comparison Rate*

3.19%

Company
Pepper
Repayment

$1,421

monthly

Features
Redraw facility
Offset Account
Borrow up to 75%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.16

/ 5
Go to site
More details
Advertised Rate

3.09%

Variable

Comparison Rate*

3.29%

Company
Pepper
Repayment

$1,437

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.03

/ 5
Go to site
More details
Advertised Rate

3.47%

Variable

Comparison Rate*

3.51%

Company
Resimac
Repayment

$1,497

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.78

/ 5
Go to site
More details
Advertised Rate

3.35%

Variable

Comparison Rate*

3.55%

Company
Pepper
Repayment

$1,478

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.03

/ 5
Go to site
More details

Learn more about home loans

While being self-employed has its advantages, it can make applying for a standard home loan a more complicated.

Without access to regular payslips or salary documentation, low-doc home loans give freelancers, contract workers, investors and self-employed borrowers the option of applying for a home loan with less documentation than standard home loans.

What is a low-doc home loan?

Low-doc home loans get their name from providing low documentation. For borrowers that are self-employed, those who freelance or own their own small business, getting access to payslips and group certificates can be challenging. The lack of traditional documentation can make applying for a standard mortgage a little trickier. That’s where a low-doc home loan comes in, giving non-traditional borrowers access to home loans minus the usual documentation.

Low-doc home loans are generally designed for self-employed borrowers who have the deposit and income to be able to pay off a mortgage but may not have all the standard documentation to prove it.

Back in the 1990s, mortgage brokers recognised that not all lenders fit into one category. Discovering a valuable niche in self-employed lending, they tapped into this group of viable borrowers and created a new category of home loans called low-doc home loans.

Until low-doc home loans came along, getting access to a mortgage was difficult for non-traditional borrowers. What low-doc loans do is provide self-employed, freelancers and small business owners with the ability to provide different kinds of proof of income documentation when applying for a home loan. 

With the number of self-employed borrowers on the rise, the increasing demand for low-doc home loans means there are a lot more options available for non-traditional borrowers. With low-doc home loans now available from all sorts of lenders, it’s important to compare your options and find the best low-doc home loan for you.

As self-employed borrowers generally don’t look as solid on paper as more traditional employees with pay slips, banks and lenders offering low-doc home loans will often insist borrowers pay a larger deposit and some low-doc home loans may have higher interest rates than traditional loans.

While each low-doc home loan lender will have their own rules and conditions, self-employed borrowers will generally have to provide at least two years of personal tax returns, business activity statements (BAS), profit and loss statements, and in some cases an accountant’s letter verifying their financial position.

How to compare low-doc home loans

Low-doc home loans have come a long way in recent years. With many options on the market, there’s no such thing as a one-size-fits-all low-doc home loan. Some lenders may offer specific low-doc home loans, while others may offer a low-doc version of a regular home loan. With so many options on the market, it can be hard to know how to compare low-doc home loans. Here’s what to look out for when comparing low-doc home loans.

Interest rate

Start by looking at the interest rate. Depending on the low-doc home loan, you may have the option of choosing either fixed or variable interest rates. A fixed-rate option will allow you to set the interest rate for a period. While the fixed interest rate is usually higher than a variable rate, it will give you the certainty of making set repayments for a fixed period. Your other option is to pick the variable rate and wear the risk that rates may rise, which will make your repayments more. Some low-doc home loans offer a split rate option which lets you split part of your loan between both a fixed and a variable interest rate.

Loan type

When you apply for a home loan, you’ll need to pay back both the principal amount you borrow and the interest. Some low-doc loans may offer an interest-only option, which lets you pay back the minimum amount of interest and not the principle for a fixed period.

Loan features

When comparing low-doc home loans, it’s important to look beyond the interest rate. The interest rate is an important factor to consider and compare, but there are many other aspects to weigh up.

For example, you might want a loan that allows you to make additional repayments. If you’re self-employed or freelancing, there may be periods of time when you’re earning more. In those periods, you may want to use the extra cash to pay down your home loan. A loan that allows you to make additional repayments will let you pay extra into your home loan which will ultimately reduce the amount of interest you pay over the life of the loan. Bear in mind that some loans offer this feature, but charge a small fee for it.

If your cash flow is unstable or varies throughout the year, a loan which offers a redraw feature may help buffer any ebbs and flows. A redraw facility allows you to withdraw any additional repayments you’ve made into your home loan. You can use your redraw facility to pay for things such as small renovations or a car. While the money is there to be redrawn, remember that you’ll still have to pay it back and it may push your repayment amounts up. As low-doc home loans generally tend to have lower interest rates than credit cards and personal loans, it can make more financial sense to use the redraw facility than applying for a personal loan.

If you’ve got savings or any extra cash sitting in a savings account, you might want a low-doc home loan with an offset account. An offset account that’s attached to your home loan will help save you interest and potentially shave years off your loan. For example, if you’ve got a $500,000 home loan and a balance of $40,000 in an offset account, you’ll only be charged interest on the balance of $460,000. The amount in your offset account is offset against the loan balance, saving you interest and money over the life of the loan.

Generally speaking, offset accounts are usually only available with variable interest rate low-doc home loans, so before you apply, do your research to find a loan that suits your needs.

Given that low-doc home loans are generally riskier from a lender’s perspective, the bank may require a bigger deposit than a standard home loan. When you’re comparing low-doc home loans, look out for the loan-to-value ratio (LVR) percentages. As a general rule, loans that have a LVR of over 80 per cent are required to pay lender’s mortgage insurance. To avoid any extra charges, take note of the LVR and deposit requirements.

Other low-doc home loan features to look out for are loan portability which lets you take your low-doc home loan with you when you move. Depending on our cash flow, you may be able to find a loan that lets you change your repayments from monthly to weekly or fortnightly.

How do I apply for a low-doc home loan?

Once you’ve compared your low-doc home loan options and found a loan that suits you, you will need to gather your documentation before you apply. While each lender has their own application process, they may generally require some or all of the following documentation:

  • Proof of identification
  • Proof you’ve been working in the same industry for at least 12 months
  • A registered business name and an ABN
  • At least 12 months of lodged business activity statements (BAS)
  • Proof of registration of GST
  • Personal and business bank statements
  • A declaration from your accountant verifying your income

Frequently asked questions

Who has the best home loan?

Determining who has the ‘best’ home loan really does depend on your own personal circumstances and requirements. It may be tempting to judge a loan merely on the interest rate but there can be added value in the extras on offer, such as offset and redraw facilities, that aren’t available with all low rate loans.

To determine which loan is the best for you, think about whether you would prefer the consistency of a fixed loan or the flexibility and potential benefits of a variable loan. Then determine which features will be necessary throughout the life of your loan. Thirdly, consider how much you are willing to pay in fees for the loan you want. Once you find the perfect combination of these three elements you are on your way to determining the best loan for you. 

What is a low-deposit home loan?

A low-deposit home loan is a mortgage where you need to borrow more than 80 per cent of the purchase price – in other words, your deposit is less than 20 per cent of the purchase price.

For example, if you want to buy a $500,000 property, you’ll need a low-deposit home loan if your deposit is less than $100,000 and therefore you need to borrow more than $400,000.

As a general rule, you’ll need to pay LMI (lender’s mortgage insurance) if you take out a low-deposit home loan. You can use this LMI calculator to estimate your LMI payment.

How do you determine which home loan rates/products I’m shown?

When you check your home loan rate, you’ll supply some basic information about your current loan, including:

  • the amount owing on your mortgage
  • the value of your property
  • your current interest rate
  • name of existing lender
  • property address

We’ll compare this information to the home loan options in the RateCity database, and show you which home loan products you may be eligible to apply for.

How do I take out a low-deposit home loan?

If you want to take out a low-deposit home loan, it might be a good idea to consult a mortgage broker who can give you professional financial advice and organise the mortgage for you.

Another way to take out a low-deposit home loan is to do your own research with a comparison website like RateCity. Once you’ve identified your preferred mortgage, you can apply through RateCity or go direct to the lender.

How common are low-deposit home loans?

Low-deposit home loans aren’t as common as they once were, because they’re regarded as relatively risky and the banking regulator (APRA) is trying to reduce risk from the mortgage market.

However, if you do your research, you’ll find there is still a fairly wide selection of banks, credit unions and non-bank lenders that offers low-deposit home loans.

What is a variable home loan?

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

How can I get a home loan with bad credit?

If you want to get a home loan with bad credit, you need to convince a lender that your problems are behind you and that you will, indeed, be able to repay a mortgage.

One step you might want to take is to visit a mortgage broker who specialises in bad credit home loans (also known as ‘non-conforming home loans’ or ‘sub-prime home loans’). An experienced broker will know which lenders to approach, and how to plead your case with each of them.

Two points to bear in mind are:

  • Many home loan lenders don’t provide bad credit mortgages
  • Each lender has its own policies, and therefore favours different things

If you’d prefer to directly approach the lender yourself, you’re more likely to find success with smaller non-bank lenders that specialise in bad credit home loans (as opposed to bigger banks that prefer ‘vanilla’ mortgages). That’s because these smaller lenders are more likely to treat you as a unique individual rather than judge you according to a one-size-fits-all policy.

Lenders try to minimise their risk, so if you want to get a home loan with bad credit, you need to do everything you can to convince lenders that you’re safer than your credit history might suggest. If possible, provide paperwork that shows:

  • You have a secure job
  • You have a steady income
  • You’ve been reducing your debts
  • You’ve been increasing your savings

Is the competition just for home loans? What about personal/car loans and credit cards?

This competition is currently for home loans only.

You may still be able to save money by checking the interest rates, fees, and charges on your personal loan, car loan or credit card – compare your options at RateCity.

But keep your eyes open – we may add options for car loans, personal loans, credit cards and more in the future.

What is a fixed home loan?

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

The fine print – what are the eligibility criteria?

This competition is only available to Australian residents who are over 18 and check their home loan interest rate at RateCity. However, you are not required to refinance your home loan or apply for any financial products.

You can still enter if you don’t have a home loan yet – enter how much you plan to borrow and the details of the property you’re considering, and we’ll compare mortgage offers that may suit your needs and estimate how much you could save compared to a loan with an average interest rate. 

Are bad credit home loans dangerous?

Bad credit home loans can be dangerous if the borrower signs up for a loan they’ll struggle to repay. This might occur if the borrower takes out a mortgage at the limit of their financial capacity, especially if they have some combination of a low income, an insecure job and poor savings habits.

Bad credit home loans can also be dangerous if the borrower buys a home in a stagnant or falling market – because if the home has to be sold, they might be left with ‘negative equity’ (where the home is worth less than the mortgage).

That said, bad credit home loans can work out well if the borrower is able to repay the mortgage – for example, if they borrow conservatively, have a decent income, a secure job and good savings habits. Another good sign is if the borrower buys a property in a market that is likely to rise over the long term.

What is a credit limit?

The maximum amount that can be borrowed from a lender, as per the home loan contract.

What is appraised value?

An estimation of a property’s value before beginning the mortgage approval process. An appraiser (or valuer) is an expert who estimates the value of a property. The lender generally selects the appraiser or valuer before sanctioning the loan.

What is the difference between fixed, variable and split rates?

Fixed rate

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.

Variable rate

A variable rate home loan is one where the interest rate can and will change over the course of your loan. The rate is determined by your lender, not the Reserve Bank of Australia, so while the cash rate might go down, your bank may decide not to follow suit, although they do broadly follow market conditions. One of the upsides of variable rates is that they are typically more flexible than their fixed rate counterparts which means that a lot of these products will let you make extra repayments and offer features such as offset accounts.

Split rates home loans

A split loan lets you fix a portion of your loan, and leave the remainder on a variable rate so you get a bet each way on fixed and variable rates. A split loan is a good option for someone who wants the peace of mind that regular repayments can provide but still wants to retain some of the additional features variable loans typically provide such as an offset account. Of course, with most things in life, split loans are still a trade-off. If the variable rate goes down, for example, the lower interest rates will only apply to the section that you didn’t fix.

How can I get a home loan with no deposit?

Following the Global Financial Crisis, no-deposit loans, as they once used to be known, have largely been removed from the market. Now, if you wish to enter the market with no deposit, you will require a property of your own to secure a loan against or the assistance of a guarantor.

How does a redraw facility work?

A redraw facility attached to your loan allows you to borrow back any additional repayments that you have already paid on your loan. This can be a beneficial feature because, by paying down the principal with additional repayments, you will be charged less interest. However you will still be able to access the extra money when needed.

Which mortgage is the best for me?

The best mortgage to suit your needs will vary depending on your individual circumstances. If you want to be mortgage free as soon as possible, consider taking out a mortgage with a shorter term, such as 25 years as opposed to 30 years, and make the highest possible mortgage repayments. You might also want to consider a loan with an offset facility to help reduce costs. Investors, on the other hand, might have different objectives so the choice of loan will differ.

Whether you decide on a fixed or variable interest rate will depend on your own preference for stability in repayment amounts, and flexibility when it comes to features.

If you do not have a deposit or will not be in a financial position to make large repayments right away you may wish to consider asking a parent to be a guarantor or looking at interest only loans. Again, which one of these options suits you best is reliant on many factors and you should seek professional advice if you are unsure which mortgage will suit you best.

Mortgage Calculator, Deposit

The proportion you have already saved to go towards your home. 

What is a construction loan?

A construction loan is loan taken out for the purpose of building or substantially renovating a residential property. Under this type of loan, the funds are released in stages when certain milestones in the construction process are reached. Once the building is complete, the loan will revert to a standard principal and interest mortgage.

Does Australia have no-deposit home loans?

Australia no longer has no-deposit home loans – or 100 per cent home loans as they’re also known – because they’re regarded as too risky.

However, some lenders allow some borrowers to take out mortgages with a 5 per cent deposit.

Another option is to source a deposit from elsewhere – either by using a parental guarantee or by drawing out equity from another property.