Non-bank lenders are home loan providers that do not take deposits. They fund loans through wholesale markets, hold an Australian credit licence from ASIC and must follow the same responsible lending laws as banks. Their appeal is policy: many accept self-employed income, recent credit problems or property types that banks decline, sometimes at competitive rates and sometimes at a premium.

Banks and non-bank lenders compared
Item Bank Non-bank lender
Takes deposits Yes No
Regulated by APRA and ASIC ASIC for lending conduct; APRA has reserve powers it has not used
APRA debt-to-income limit Applies from February 2026 Does not apply
Funding Deposits and wholesale Wholesale and securitisation
Strengths Pricing for straightforward loans, branches, full product range Flexible policy: self-employed, alt doc, credit repair, unusual security

Are non-bank lenders safe to borrow from?

For a borrower, the main protections are the same: a credit licence, responsible lending obligations, hardship rights and access to the Australian Financial Complaints Authority. The difference is on the deposit side, which does not affect you as a borrower. What matters more is the loan itself: the rate, the fees and whether you can refinance away later.

Why would a non-bank lend when a bank won’t?

Because their credit policies are set for particular borrowers. A non-bank may accept a business owner’s BAS instead of tax returns, a paid default from last year, a short time in a new job, or a property a bank rates as high risk. One non-bank’s published alt doc product, for example, allows cash out for acceptable purposes up to 80% of the value and considers minor defaults. APRA’s debt-to-income limit, which caps high-DTI lending at banks, does not apply to non-bank lenders either, and the same lender tests repayments with a 2% buffer on that product, where banks use 3 percentage points. The Resimac review sets out that lender’s ranges in full.

Are non-bank rates higher?

Not always. For simple, low-risk loans some non-banks price close to or below the banks. For specialist loans, the rate is higher to reflect the risk, sometimes by one or two percentage points or more. On a $600,000 loan over 30 years, every extra percentage point adds about $395 a month at these rates (6% costs $3,597, 7% costs $3,992).

When does a non-bank make sense?

  • Self-employed with recent or uneven income; see low doc home loans.
  • Credit history being repaired; see refinancing with bad credit.
  • High debt relative to income, where bank DTI limits bite; see debt-to-income ratio.
  • Property types banks avoid, such as some small units or rural land.
  • A competitive standard loan, where a non-bank simply prices better.

What should you check before choosing one?

  1. The comparison rate and every fee, including discharge and ongoing fees.
  2. Whether the rate can be reviewed after a period of good conduct.
  3. Features you rely on: offset, redraw, split loans.
  4. How easy it will be to refinance to a bank once your situation improves.

The guide to the comparison rate explains how to compare total costs, and complex lending covers the situations where specialist lenders come in.

Questions people ask

What is a non-bank lender?

A licensed lender that does not take deposits and funds its loans through wholesale markets.

Can I refinance from a non-bank to a bank later?

Yes, and it is common once the reason for the non-bank loan, such as a recent default or new business, is behind you.

Do non-bank lenders offer offset accounts?

Some do; check the product, because features vary more than at banks.

Charles Touma compares bank and non-bank lenders on the panel side by side, so a non-bank is used only when it is genuinely the better fit, with a plan to move later if it costs more. A free 30-minute call covers your situation and the options. General information only, not credit advice; lender policies change, and your own circumstances decide what suits you.

Sources: ASIC, credit licensees; APRA, debt-to-income limit; APRA, macroprudential settings and non-bank lenders; Resimac, Prime Alt Doc features, checked 20 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.