Types of lenders
Not sure how banks are different from building societies? Don’t worry, you’re not alone. Take a look at the different types of lenders to know who’s who
Just as there are lots of home loans to choose from, there are also plenty of providers. From banks to building societies and online lenders, we help you get to know the market.
Compare types of financial institutions
This might be the type of lender you’re most familiar with. Banks are typically long-established institutions – and you likely had an account with one from a very young age! They can offer the advantage of a big branch network
Non-bank lenders are privately-owned institutions, which are neither banks nor building societies as they do not hold a banking licence. But don’t let that put you off, they still must abide by the same laws and regulations, which govern all credit transactions in Australia.
Mutuals – or “member-owned” lenders
Building societies, credit unions and member-owned banks all fall under the banner of “mutuals” as they are owned by members
What is the difference between a bank, building society and
All these institutions provide home loans, though the way they each operate can differ dramatically.
Banks are generally owned by
Building societies and credit unions differ from banks and non-banks as they are owned by their members. Rather than passing on profits to shareholders, they aim to pass profits on to their members in the form of better interest rates, lower fees and improved banking products.
Best mortgage lenders for first time home buyers
No single mortgage lender is right for every first home buyer. That’s because lenders each have different rules or “lending criteria” for their home loans.
What matters is that you have the home loan that is right for your needs. Your Aussie Broker can take the guesswork out of this, finding the loan that is best suited to your situation.
Bank or broker?
You may have banked with one financial institution for a long time. But that doesn’t mean they have the right home loan for your needs.
In the bank versus broker debate, brokers offer a valuable advantage.
A single bank will only have one, or maybe a couple, of home loans. However, because a mortgage broker works with a large number of lenders, you get the benefit of greater choice – and a better chance of finding the loan that’s just right for your circumstances.
What is a mortgage broker and what do they do?
A mortgage broker’s job is to work through the different types of loans, features and options available – helping you compare and ultimately choose the right loan.
So while the landscape of lenders may seem complicated, there is a way of navigating it with simplicity: Do your research and go to your Aussie Broker with an open mind.
Advantages of using a mortgage broker
The big plus of using a mortgage broker goes beyond knowing you have the right loan for your needs. Your broker will also guide you through the loan application process.
If you are nervous about going with a bank, don’t be – the options your broker puts on the table will be right for your needs. If you are nervous of non-bank lenders, don’t be either – Aussie works with responsible lenders.
And remember – ultimately it’s up to you, so if you don’t want to go with a particular type of lender, you don’t have to!
Short term home loan sweeteners can be tempting but it pays to focus on the long run. Remember, there is no right or wrong answer when it comes to which type of lender is right, it all comes down to which lender is right for you.
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Take the next step to buying your first home
- Chapter One : Getting started
- Chapter Two : Your dream home
- Chapter Three : Money matters
- Chapter Four : Ways to purchase
- Chapter Five : Understanding interest rates
- Chapter Six : Understanding home loans
- Chapter Seven : Lending sources
- Chapter Eight : Getting your loan
- Chapter Nine : Choosing a home
- Chapter Ten : Steps to settlement