Home loans

Choosing a home loan lender – which is right for you?

3 min read

Home loans

Choosing a home loan lender – which is right for you?

3 min read

It can be hard to navigate the many loan options on the market. To make it easier, we’ve outlined the different types of lenders out there and how talking to a home loan expert can help you match your goals with the right home loan. 

The different types of mortgage lenders

You can find a home loan from all sorts of mortgage lenders. Deciding which one suits you depends on your financial situation and goals. Different types of mortgage lenders can offer similar loan options, so talking to a home loan expert can help you understand your goals and what types of loans could suit you best.

Traditional banks

A traditional bank is typically a publicly listed company owned by shareholders. Often referred to as ‘retail banks’, these make up the majority of financial institutions.

Getting a loan with Suncorp Bank means you benefit from the investment we put into a supportive and smooth customer service. Our home loan experts understand our various loans and how they could suit those with different goals and requirements.

Mutual banks and credit unions

Mutual banks and credit unions are very similar and are both owned by their customers, also known as members. They’re typically smaller than most retail banks, but can offer similar products and rates. 

Are banks safer than credit unions?

Banks, mutual banks and credit unions must all have what’s known as an Authorised Deposit-taking Institution (ADI) licence. An ADI licence is provided by the Australian Prudential Regulatory Authority (APRA). This means the company is regulated by APRA and those deposits from its members or customers are guaranteed up to $250,000 per account holder by the Australian Government.

What about non-bank lenders?

A non-bank lender doesn’t have an Authorised Deposit-taking Institution (ADI) licence. It is, however, governed by the National Consumer Credit Protection Act (NCCP). It’s a common myth that non-bank lenders are more flexible in their loan criteria than traditional banks, as responsible lending isn’t linked to the size of a credit provider. 

What to look for in a home loan lender

When comparing home loan lenders, the following things can help you understand what home loans match with your goals and situation.

  • Loan types – what different options does that home loan lender offer for variable, fixed or split home loans? It can be helpful to talk to a home loan expert to understand how the differences between loan types can help you choose between home loan lenders.
  • Duration – different loan durations (e.g. 20 years vs. 30 years) can affect the overall interest you pay.
  • Fees – what fees does that home loan lender charge? They may offer a higher application fee but no annual fees or vice versa, so talking to a home loan expert can help you understand what could be cheaper for you in the long-term.
  • Conditions – get to know the different types of things you can do with your home loan. For instance, some home loans cap the amount of extra repayments you make in a year. If you go over the cap, you might have to pay an interest adjustment amount or additional fees. Other things to consider are fees associated with refinancing your loan as well as any available discounts or offers associated with a loan.
  • Borrowing capacity – a home loan lender should be able to run you through your borrowing capacity for different interest rate scenarios.

Finally, what kind of impression do you get of a home loan lender you’re considering? For instance, do they present you with your options clearly and early on in the process, or do you feel pressured into a loan you don’t know much about? Are they quick to respond to your queries? Trust is very important when choosing a home loan lender, so be sure you feel supported and that your home loan lender is being open and clear about your borrowing capacity.

Find out more about how to choose between home loans.

Talking to a mortgage broker

A mortgage broker typically doesn’t work for a specific home loan lender. They either work on their own or with an aggregator to present potential buyers with a variety of loan options. A mortgage broker often has an insight into the current state of the market as a whole. They also understand the various rates and home loan types on offer at any given moment.

A home loan expert, on the other hand, represents a specific home loan lender. They understand their product back-to-front. If you want to really understand what your options are for a specific lender, talking to a home loan expert will give you deep insight that can help you make a decision. 

What happens when you talk to a home loan expert?

Marsha Strelow is a Mobile Banking Manager at Suncorp Bank. Below she outlines the benefits of talking directly to someone like herself before applying for a loan and what sort of conversations you might have to help guide your decisions.

Define your first steps through a supportive conversation

“Coming directly to a home loan expert at Suncorp Bank ensures people can talk to someone who gets their specific requirements and objectives and who can help them match loan offers with their needs,” says Marsha.

“People also like to have a direct relationship with their mortgage provider. They like to know that their bank understands where they are at, knows their financial goals and is aware of their various requirements.”

Set out a plan for your home loan

Typically a home loan expert will ask questions around:

  • the person’s current financial situation
  • what they’re looking to achieve
  • if they have had lending in the past and what they have and haven’t liked about previous experiences
  • their short and longterm goals
  • how they wish to manage their debt
  • strategies for repayment.

Sometimes these topics can be discussed over separate conversations.

“I’ll also work with people from the start of a transaction and continue to guide them through the process,” says Marsha. “Lenders like myself will also keep in contact with clients well after the initial transaction has been completed.”

Come away with a better idea of your borrowing capacity

A home loan expert like Marsha will talk to you in detail to understand your borrowing capacity.

“We can provide people with a number of documents which may include outlines of various calculations on their potential borrowing amount, their repayment structure, as well as costings and fees.” 

Looking for guidance when finding a loan?

We’re here to help guide you through your loan options. Talking to a Suncorp Bank home loan expert can help you understand your goals, point you towards the right home loan and support you in your journey to owning a property.

Talk to a home loan expert

Published 28 March 2022

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Home Loans are provided by Suncorp-Metway Ltd ABN 66 010 831 722 AFSL No. 229882 Australian Credit Licence 229882 (“Suncorp Bank”) to approved applicants only. Please read the relevant Product Information Document, Lending Fees and Charges and Home Package Plus Terms and Conditions before making a decision regarding any Suncorp Bank products. Fees, charges, terms and conditions apply and are available on request or on our Product Information Documents and Forms page.

The information is intended to be of a general nature only and any advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.