Quick answer
A non-bank home loan comes from a lender that is not a deposit-taking bank. Non-bank lenders often apply different policies for self-employed income, credit blemishes and unusual properties. Ownright Custom Finance compares non-bank lenders for you and arranges the loan Australia-wide.
Key points
- Non-bank lenders are not deposit-takers, so they raise funds differently and set their own policies
- They are still licensed credit providers with responsible lending obligations
- They can suit self-employed, casual, credit-impacted and unusual-property borrowers
- A non-bank loan may be a stepping stone back to a mainstream lender later
- Suits
- Borrowers whom bank policy struggles to fit
- Security
- Residential property
- Regulated by
- ASIC as credit licensees; they are not APRA-regulated deposit-takers
- Australia-wide
- Yes
What is a non-bank home loan?
A non-bank home loan is a mortgage from a lender that does not take deposits from the public. Where a bank lends partly out of savings and transaction accounts, a non-bank typically raises its funds from wholesale markets or investors, then lends them out as home loans.
That difference in funding gives non-bank lenders room to set their own credit policy. They are licensed credit providers, they have to follow responsible lending rules, and they sit within the same dispute resolution system as the banks. But the way they read an application can be quite different. For borrowers who do not fit a bank’s template, that can be the difference between a no and a yes.
How is a non-bank different from a bank?
| Question | Bank (deposit-taker) | Non-bank lender |
|---|---|---|
| Where do loan funds come from? | Customer deposits plus wholesale funding | Often wholesale funding and investors |
| Who supervises prudentially? | APRA | Not APRA; ASIC regulates conduct under the credit licence |
| How rigid is policy? | Often standardised for the whole customer base | Often more specialised by borrower type |
| Everyday banking | Accounts, cards, branches | Usually the loan only |
| Best for | Clean, conventional files | Self-employed, credit-impacted, unusual security |
APRA has kept its serviceability buffer at 3 percentage points and its debt-to-income guardrails unchanged as of May 2026. Those settings shape how banks assess applicants. Non-bank lenders operate under consumer lending law and ASIC’s responsible lending guidance rather than APRA’s prudential settings, and many choose their own approach to how they test affordability.
Who do non-bank home loans suit?
- Self-employed borrowers whose taxable income does not reflect real cash flow. See our self-employed home loans page.
- Borrowers with a credit blemish who have recovered and can explain what happened.
- People with variable or casual income that fits few bank templates.
- Buyers of non-standard property, such as small apartments, rural-residential blocks or properties with unusual zoning.
- Borrowers wanting a bridge while a tax history or credit record improves, with a plan to move to a mainstream loan later.
Is this the right path for me?
A short conversation will tell you. Send us your situation and we will say plainly whether a non-bank lender is likely to suit or whether a mainstream loan is still workable.
What do non-bank lenders look at?
They look at the same fundamentals as any lender, with different emphasis.
- Capacity to repay. Income evidence, expenses and existing debts. Some non-bank lenders use alternative documents for self-employed borrowers.
- Credit history. Many weigh the age and nature of any defaults and the story behind them.
- The security. Value, location, type and marketability.
- Deposit or equity. More cautious profiles may be asked for a larger buffer.
- The exit plan. For some products, how you intend to move to a longer-term loan.
Pricing reflects the profile and the loan, so we do not publish rates. Each loan is priced on your circumstances, and our aim is to find the most competitive outcome available for them.
What are the trade-offs?
Honesty matters here. A non-bank loan can cost more than a mainstream loan over time, and some products have features, such as exit fees or restrictions on redraw, that differ from what a bank would offer. The benefit is access: a way to buy, refinance or restructure when the standard route is closed. We lay out the whole picture before you decide, and where it makes sense we plan the move back to a mainstream lender when your position improves.
How does Ownright approach non-bank lending?
Trevor Scott built his career on finding workable solutions, and the team applies that to non-bank selection. We look at policy rather than brochures. One lender may count rental income more generously, another may accept a shorter trading history, another may be relaxed about a particular property type. Matching you to the right policy is the heart of the job.
We also look past the obvious. There are lenders and structures that most brokers rarely use, and the combination that works for a tricky file is sometimes unconventional. If Ownright can’t find the solution, no one can. We work with borrowers across every state and territory from our Knoxfield, Victoria office.
For a plain-English overview of the whole sector, our guide to non-bank lenders explained goes through the main types.
An illustrative example
This scenario is illustrative only and does not describe a real client.
A freelance graphic designer has been trading for three years. Her tax returns show modest profit because she writes off a large home-office and equipment cost, yet her bank statements show strong, steady deposits. A bank assessed only the tax returns and declined.
Ownright submits her returns, BAS and statements to a non-bank lender whose policy accepts a broader picture of income. It approves subject to valuation. She plans to refinance to a mainstream lender once her returns show a higher taxable profit.
Mistakes to avoid
- Assuming non-bank means unregulated. It does not.
- Choosing on headline appeal without reading the exit terms.
- Applying with several lenders at once and leaving multiple enquiries on file.
- Forgetting to plan for the next step, such as a refinance in a year or two.
- Leaving out an awkward detail that the lender will find anyway.
Documents to have ready
- Photo ID and proof of address.
- Recent payslips, or tax returns, notices of assessment and BAS if self-employed.
- Six months or more of bank statements, where available.
- Statements for existing loans and credit cards.
- Property details or contract of sale.
- A short note explaining anything unusual, such as a past default or income dip.
What kinds of non-bank lenders are there?
The term covers a broad group, and they do not all behave alike.
| Type | Typical character | Often considered when |
|---|---|---|
| Established non-bank mortgage lenders | Lend on standard residential security with their own credit policy | The bank says no on income or credit, but the file is otherwise sound |
| Specialist lenders | Focus on self-employed, low doc or credit-impacted borrowers | The paperwork is the main issue |
| Mortgage managers and funds | Lend funds raised from investors | The scenario is unusual and the lender needs flexibility |
| Private lenders | Individuals or small funds lending on the strength of the property | The need is short-term, urgent or highly bespoke |
Our page on private lenders in Australia covers the last group in more detail.
Can a non-bank loan be refinanced to a bank later?
Often, yes, and many borrowers plan for it. A non-bank loan can give you the time to lodge another tax return, repair your credit record or settle into a new job. Once your position strengthens, you can apply to a mainstream lender, ideally with a broker’s help in preparing the file. The step depends on your results and on policy at the time, so it is never certain. It is worth checking a non-bank loan’s exit terms before you sign so that leaving later is not unexpectedly costly. Our guide on how to refinance when your bank says no walks through the process.
What does a typical application look like?
The path usually has the same milestones whatever the lender:
- A conversation to understand your situation and goal.
- A shortlist of lenders whose policy fits.
- A complete application with supporting documents.
- A conditional approval, usually subject to valuation and checks.
- Formal approval, loan documents and settlement.
Where you hit snags, such as a valuation that comes in short or a document the lender wants clarified, a broker can handle them. The speed depends on the lender and how quickly information arrives.
How do non-bank lenders deal with different property types?
Security is a big part of the decision. Standard houses in metropolitan areas are usually straightforward. Small apartments, high-density blocks, student accommodation, properties on larger acreage or those with a commercial component can attract tighter rules at big banks. Some non-bank lenders are comfortable with these, while others are not. Regional and rural-residential security may be treated differently again. If you are buying something out of the ordinary, tell us at the outset, because property type can narrow the choice of lender quicker than anything else. See difficult home loans for situations that fall outside the usual lines.
How do state and territory differences affect a non-bank loan?
The lending law is national, but the property side is not. Stamp duty, first-home concessions and grants, land title processes and valuation practices differ across the states and territories. Lender appetite also varies by postcode, with some excluding specific mining towns, remote areas or oversupplied apartment markets. A borrower in Darwin, Hobart or regional Queensland can find the shortlist quite different from one in a Sydney suburb. Ownright works across every state and territory and takes your location into account when choosing lenders. Pages such as loans in the Northern Territory and loans in Sydney explain local points.
Should you worry about the reputation of a non-bank lender?
It is a fair question. Non-bank lenders that offer consumer home loans must hold an Australian credit licence and belong to the external dispute resolution scheme, which gives you somewhere to go if something goes wrong. You can check a credit licensee on the ASIC register. As with any lender, read the loan contract, understand the fees and exit terms, and ask questions before you sign. A broker’s role includes explaining the contract in plain terms. MoneySmart also publishes independent guidance on comparing and switching home loans.
What if you are not sure whether a bank or non-bank suits you?
Many borrowers start in the wrong place, applying to a bank and being declined, then worrying that the decline now stands against them. A broker can check your file before you apply, so the first application goes to the right kind of lender. If you have already been declined, that does not close the door elsewhere. Tell us what happened, share your details, and we will look at which route makes sense.
Talk to us about your options
Apply online or ring Ownright Custom Finance on 03 7043 7233. If you also want to understand where a private lender fits, see private lenders in Australia.
How it works, step by step
- 1
Step 1
We learn why the bank approach has not worked, or what you expect will be hard about it.
- 2
Step 2
We compare non-bank lenders by policy fit, not by advertising.
- 3
Step 3
We lodge a complete file that answers the lender's likely questions up front.
- 4
Step 4
We manage conditions, valuation and settlement, and revisit the loan when your position improves.
Frequently asked questions
What is a non-bank lender?
A non-bank lender provides loans without taking customer deposits. It typically funds loans through wholesale markets or investors instead. Non-bank lenders hold an Australian credit licence and must follow the same consumer lending laws as banks, though their policies and products can differ.
Are non-bank home loans safe?
Non-bank lenders are licensed and regulated by ASIC for their lending conduct and must be members of the Australian Financial Complaints Authority. Like any loan, the terms matter. We explain the features, fees and exit options before you decide.
Why would a non-bank approve what a bank declined?
Policies differ. A bank may use a rigid formula for self-employed income or reject a certain property type, while a non-bank lender may assess income differently or accept the security. Neither approach is wrong; they just suit different borrowers.
Can I move back to a bank later?
Often, yes. Many borrowers use a non-bank loan while a tax return history builds or a credit file recovers, then refinance when their position changes. Check the loan terms for exit costs so the move is clean.
Do non-bank lenders require a valuation?
Lenders usually arrange a valuation of the security as part of assessing a home loan. The type of valuation and who orders it vary by lender and property.
Do APRA's lending limits apply to non-bank lenders?
APRA's prudential settings, including the serviceability buffer held at 3 percentage points in 2026, apply to the institutions it supervises, mainly banks and similar deposit-takers. Non-banks set their own assessment approach within consumer lending law, which is one reason their policies differ.