Looking for a home loan? A bank might be your first thought, but it’s not the only option. In fact, online lenders are a great way to find a home loan with low rates.

Whether you’re considering your first home or buying an investment property, deciding where to get your home loan from can be a tough decision. As tech evolves every year, so does the way we choose to use and connect with our finances.

Online-based home loan lenders have made significant strides into the Australian home loan market in a bid to provide cheaper and more innovative home loan options.

Also, by basing themselves entirely online, online lenders can compete with banks, offering customers low-interest rates and low fee options.

Let’s take a look at how online-based home loan lenders can make your home loan experience a breeze.

What is an online lender, exactly?

An online lender is an example of an alternative to a traditional bank. These lenders allow customers to borrow money without having to leave the house.

They’re different from the major lenders – what we know as the ‘big four’ banks. They don’t have brick and mortar branches and connect with their customers entirely online.

Given how much we use technology in our everyday life, online lenders can be a great option.

So if online lenders can offer cheap interest rates, lower fees and fast loan approvals, along with an easy online application process, what should you consider when choosing one?

What’s their comparison rate?

First and foremost: Don’t get caught out here. Look at the comparison rate.

A comparison rate is a more accurate representation of your loan rate. It considers any extra fees associated with your home loan over its lifetime. These could include:

  • The interest rate of the loan
  • The cost of setting up the loan and the loan approval fee (Tic:Toc doesn’t have these fees)
  • Any ongoing fees
  • Any discharge fees for leaving the lender

When you consider the above, you’ll realise why a comparison rate is typically much higher than its interest rate—the higher the comparison rate, the more fees and extra costs associated with the loan.

This is why it’s important to pay attention to comparison rates because they’re a great way of understanding the actual cost.

Are they covered by the Financial Claims Scheme (FCS)?

Now you’ve checked the lender’s comparison rate, let’s talk about Authorised Deposit-taking Institution (ADI). The next thing to check is whether the lender is an ADI or backed by an ADI.

The Australian government guarantees the deposits of ADI account holders in the event of institutional failure under the FCS. In plain English, if your bank or lender goes bust (whether from a globally-disruptive event or too much risk-taking), the government will compensate your loss up to a maximum of $250,000.

But why does this matter, you ask? Two reasons:

  • If you have an offset account with a non-ADI backed lender, your offset account savings won’t be guaranteed under the FCS.
  • If you have a redraw account, which aren’t typically covered by the FCS, any funds there will likely be inaccessible to you while your bank or lender is bailed out, bought out or sheds their loan book to other banks or lenders.

How easily can they be contacted if I have questions?

Not all online lenders offer instant customer service, and response times will vary from lender to lender.

Getting a home loan is a big move, and you want to pick a provider who can answer your questions straight away. So, if service is a priority to you, look for a lender available beyond business hours. A lender with online web chat is a huge plus too.


Tic:Toc is an online home lender with Australian-based home loan experts. The Tic:Toc platform strips time and cost out of the home loan process, making decisions about your application as you complete it online in real-time. Tic:Toc loans are backed and funded by Bendigo and Adelaide Bank.