Finding the best mortgage lender takes plenty of research and looking around.

How to Compare Mortgage Lenders and Why You Should

Looking for a home loan can be stressful and confusing. Every advertisement promises the best of everything for a cost of next to nothing. So, how do you find the best home loan rate?

For starters, be clear about what you need. Home loans come with different options and features. These can offer flexibility or let you pay off your loan faster. Things like the stability of a fixed rate, the monthly repayment amount on a shorter loan, or the temporary savings of an interest-only loan each have merit for specific borrowers.

Rather than a regular home loan, you may be interested in home refinance loans or home loan investor rates. You need the one that will work for you. However, how do you know the right loan?
The best loan begins with the right lender. While some believe that banks are the safest choice, it is essential to remember that banks and non-bank lenders must abide by the same laws, rules, and regulations. In Australia, potential home buyers have several options regarding where to turn for a mortgage.


Banks are seen as a traditional method of getting a mortgage as well as other types of loans. Banks are under the oversight of the Australian Prudential Regulation Authority (APRA), an independent statutory authority that supervises institutions across banking, insurance, and superannuation.

Credit Unions and Building Societies

Credit Unions and Building Societies offer members home and personal loans, as well as deposit and payment services. These entities are overseen by APRA, the agency that governs the actions of Authorised Deposit-taking Institutions (ADIs), including banks, credit unions, and building societies.

Non-Bank Lenders

Money Market Corporations

This is an unlisted managed investment scheme where investors pool money with other like-minded investors. These frequently operate in wholesale markets, borrowing from, and lending to large corporations.

The Australian Securities and Investments Commission (ASIC) regulates money market corporations as they are not ADIs.

Finance Companies

The categorisation includes general financiers as well as pastoral finance companies. Finance companies typically provide loans to small- to medium-sized businesses (SMEs) and private households. They often raise funds from wholesale markets and unsecured notes from retail investors. ASIC regulates finance companies because they are not designated as ADIs.

Online Companies

Online lenders operate with very low overhead, which helps them save money and pass on the savings to clients. Even though there are scores of legitimate online lenders, some people are concerned about whether the company they want to work with is authentic. To learn more about lenders, you may want to work with, use ASIC Connects Professional Registers to check your credit provider has a license.

How Can I Spot a Fake Finance Company?

Aside from looking on the ASIC Professional Register, there are a few telltale signs that should cause you to pause your transaction until you can get more information. These include:

  • A hard sell, lofty promises, and few facts to back up claims
  • Complicated explanations or use of highly complex terminology
  • High pressure for you to make a quick decision
  • No way to call back or follow up with the seller
  • Sketchy or questionable details or business practices
  • Surprise fees that seem to come from nowhere
  • Unsolicited approaches by phone, email, text, or in person

What Legitimate Fees Can I Expect?

One of the best ways to know if something is false is to learn about what is genuine. Here are a few examples of fees you may see as you search for your loan.

  • Break fees: Charged when you exit a loan during the fixed-rate period, such as when you refinance (see this page to learn more) to another lender
  • Ongoing fees: Annual or monthly fees that help cover the lender’s ongoing administrative costs
  • Redraw fees: If your mortgage has a redraw facility, you may be charged a fee when you use this feature to access the extra repayments you’d previously paid onto the loan.
  • Upfront fees: Paid at the start of your home loan term to help cover the administrative costs associated with processing your application

Choosing which type of mortgage lender you work with can be a challenge, especially given the options. You will make the best decision after comparing the types of lenders.



  • Big banks are everywhere, so you can usually access them no matter what
  • Banks can usually offer a variety of services
  • Can prop up their lending
  • Do not sell mortgages frequently
  • Familiarity tends to breed a sense of security


  • Lack of flexibility when considering loans
  • Bound by credit scores
  • Frequently do not have the lowest interest rate
  • Working for shareholders and not customers

Online Lenders


  • Able to make loans based on securities, so credit scores are not the only factor involved in loan decisions
  • Can offer flexibility that banks cannot
  • Numerous choices for terms


  • Limited contact with clients
  • Can be difficult to connect
  • Have high-interest rates on some loans

Freedom Wealth Services


  • A vast number of funding sources
  • Flexibility to make your loan happen
  • Personalised approach and interest in clients
  • Well-connected relationships to leverage quick results
  • Special circumstances are not a problem
  • A long-term interest in client’s well-being and progress towards their goals

The Bottom Line

Banks and online lenders can offer clients a great many options. However, they have their fair share of limitations as well. Before you decide on a mortgage lender, talk with one of the wealth experts at Freedom Wealth Services. You will get straight answers to your questions as well as an outline of options that will provide you with the best mortgage available.

General Advice Warning – “Any financial product advice is provided by Freedom Wealth Services Pty Ltd AFSL 502934 The advice provided is general and is not personal financial product advice. The advice provided has been prepared without taking into account your objectives, financial situation or needs and because of this you should, before acting on it, consider the appropriateness of it regarding your objectives, financial situation and needs. You should carefully read and consider any Product Disclosure Statement (PDS) that is relevant to any financial product that has been discussed before making any decision about whether to acquire the financial product.”

You can contact Freedom Wealth Services Pty Ltd on 1300 843 400 or by visiting our website at