Home Loan FAQs

On some of our loan options, we offer finance up to 95% of the purchase price, meaning you can start to look at buying a house once you've saved at least 5% of the purchase price. The deposit amount needed may also depend on the property and area you’re looking at purchasing.

Remember, you’ll also need funds to be able to cover any loan fees, stamp duty and other government charges. These can’t be added to your home loan balance.

This is a calculation based on your total income, expenses, current credit exposure and your credit history. You can estimate your borrowing capacity in under 5 minutes using our home loan calculator - it’s quick, easy and won’t impact your credit score.

Different lenders charge different upfront and ongoing monthly fees, which should be factored in when saving your deposit. Some of these can be added to your loan balance, while others will need to be paid upfront – fees include establishments or application fees, and risk or mortgage insurance fees. Other smaller fees will be added to your balance each month.

You can view a summary of our home loan fees.

You’ll also need to pay solicitor fees along with local and state government taxes and levies. These can’t be added to your house loan balance and are usually paid upon settlement.

Yes. We understand that different people have different ways of making ends meet. That’s why we consider alternative sources of income in our home loan applications. Find out more about home loans for non-standard income borrowers.

Some of the alternate income sources we accept are: 

• Carer’s allowance 
• Disability support 
• Long term pensions (war/widow's pension) 
• Family tax benefits (Part A and B) 
• Worker's compensation 
• Centrelink income  
• Child support  
• Income protection payments  
• Bonus/ Commission/ Overtime 
• Rental income (up to 80%)  
• Parental leave pay  
• Car allowance/ Company vehicle 

While we can submit the First Home Owners Grant (FHOG) on your behalf, we generally cannot use it as a deposit towards your home purchase as the funds are often not available on the settlement date. For any questions related to your specific situation please give us a call on 137 377

A few things in life are certain – and one of them is taxes. While stamp duty varies in each state or territory, it generally needs to be paid upfront and can’t be added to your loan balance. 

However, there are different schemes and grants in each state to support first home buyers – so it’s worthwhile checking if you qualify for any support: First Home Owner Grant

To get an estimate of how much stamp duty you might need to pay in each state in Australia, try our Stamp Duty Calculator.

Lender’s Mortgage Insurance is a one-off fee that you’ll need to pay as a borrower to a third-party (a separate insurance company working with the lender). This is to protect the lender against the potential loss that may be incurred if you're unable to repay your home loan. This is generally charged upfront when you’re looking to borrow more than 80% of the value of the property (meaning you have an LVR over 80% - or a deposit of less than 20%).  If you refinance later the fee may be refundable in certain circumstances.

If you want to include your partner’s income in your application, you’ll need to apply as joint applicants. This will allow you to include the total income of both applicants. A word of warning, that we’ll also assess the total liabilities and expenses held for both applicants.   

All applications are subject to credit assessment and eligibility criteria, terms, conditions, fees and charges apply.

No. Unfortunately, we don't currently accept guarantors when applying for a home loan with us. We do, however accept up to 100% gifted deposits on some of our home loan options.

A home loan is a finance option that you use to help buy a house or apartment. You can also use a home loan to construct a new home or renovate your existing property. Lenders usually cover up to 75-90% of the cost of the property and some of them require you to pay a deposit - a percentage of the total purchase price. In Australia, maximum payment terms for home loans typically range from 25 years to 40 years.    

A mortgage is a type of home loan where the property itself is used as collateral for the loan. When you get a mortgage, you pay back the principal of the loan (the total amount borrowed), plus interest, over a period of time through a series of mortgage repayments.

The total amount of interest that is paid on your mortgage is determined by your loan size, duration of the loan and the interest rate charged. Interest is usually calculated daily on your outstanding loan balance, then collected when you make a repayment.

As the interest rate is key to the total amount of interest payable over your loan, we’ve made it easy to get an indicative interest rateˇ from Pepper Money online. We’ll first ask you to answer a few questions to determine how much you could borrow. Then we’ll ask a few more personal questions to access your credit file and provide you with an indicative interest rateˇ.

Let’s get started

While a high credit score might help you get a low interest rate with the banks, credit history issues or a lower credit score is something we specialise in as a non-bank. Non-bank lending options, like ours at Pepper Money is how it may still be possible to apply for a home loan in Australia with a less-than-perfect credit score. We take a real life approach and look beyond just your credit score to see what we can do to help.

Talk to a Lending Specialist about your situation. We're here to help.

Loan to Value Ratio, also known as LVR, is the percentage of the loan size in relation to the property’s total purchase price. The size of the deposit plays a key role in what the LVR is, as the larger your deposit, the lower your LVR will be. Your LVR can impact interest rates and loan products that will be available to you, and it can determine whether you’ll need to pay a lender protection fee (LPF), or other risk fees.

To calculate your LVR, divide the amount you need to borrow (e.g. $400,000) by the value of the property (e.g. $500,000) and multiply this by 100 to give you a percentage. 

$400,000/$500,000 x 100 = 80% LVR. This would mean you have a 20% deposit of $100,000 towards your $500,000 property.

The interest rates for home loans tend to vary for each individual, depending on a range of factors: 

• The amount you need to borrow against the property value; known as the Loan-to-Value Ratio (LVR) 
• The size of your deposit  
• Your income 
• Credit history 
• Any assets you own 
• Any liabilities or existing credit obligations
• Chosen repayment type – paying off interest-only, or principal and interest 
• The purpose of the loan – if it’s for an owner-occupier or investment property

You can find out what interest rate you might be eligible for in under five minutes using our home loan interest rate calculator. It’s quick, easy and won’t impact your credit score.

Interest rates can vary among lenders, so it’s important to understand the finance options available to you.  A lower interest rate could help save you money over the life of the loan - home loans are a long-term debt, and even a small percentage difference in interest rates can have a big impact on the total amount you will pay in the long run.   

You can use our Home Loan Interest Rate Calculator to estimate your indicative interest rate with just a few personal details. Plus, it won't impact your credit score.

Once you have worked out your interest rate and borrowing capacity, our mortgage repayment calculator can help you work out what your home loan repayments might look like, including the impact of extra repayments or a different deposit. 

Your credit score is a number calculated by a Credit Reporting Body (CRB) and it’s based on an analysis of the credit file they create about you. It's a file containing the collection of credit-related data they gather about you and your financial history. It is reported as a history and summarised as an overall total score. Your score may be used by some lenders to decide whether to lend you money, how much they will lend you and what interest rate will be offered to you. In Australia, getting a below average credit score means you could get higher than usual interest rates. 

Your credit score is rated on a five-point scale (excellent, very good, good, average and below average).

Excellent - you are highly unlikely to have any adverse events – like defaults or arrears – harming your credit score in the next 12 months

Very good - you are unlikely to have an adverse event in the next 12 months

Good - you are less likely to experience an adverse event on your credit report in the next year

Average - you are likely to experience an adverse event in the next year

Below average - you are more likely to have an adverse event being listed on your credit report in the next year

We don’t just look at the boxes on your home loan application. We make the effort to get to know you – the person completing the application. We ask the questions that matter so we can understand the reasons behind any issues on your credit report, which allows us to make an informed decision and work out an interest rate based on your situation. The loan amount is worked out using a range of factors (including your property goals, income and financial details), while ensuring your requirements and objectives are met.

It’s this flexible approach that helps more Aussies achieve their dreams of buying their new home with us.

Refinancing a home loan with us is straightforward. You can apply online and complete the process in less than 20 minutes if you are an eligible customer with PAYG Income. Best yet, you’ll get your indicative interest rateˇ before you apply without impacting your credit score.    

If you're self-employed or just prefer to speak to one of our friendly Lending Specialists, then submit an online enquiry or call our team on 137 377. 

There is no set timeframe you need to wait until you can refinance your home loan, however certain lenders may have some restrictions and you should consider the following when evaluating if it’s the right time to refinance:

• Why do you want to refinance? Is there a product you’ve seen that you think might better suit your situation, or have interest rates drastically changed? Has your financial situation changed? What fees might you need to outlay to refinance, and do they outweigh the benefits?  
• Read the terms of your current loans carefully (including break costs, interest rates, comparison rates, etc.) and weigh these up against the features of any refinance options you’re considering, including the loan term. Will your objectives be met?

If you're looking to refinance, you may be wondering if it will affect your credit score. It’s possible that your credit score may drop down initially after refinancing, but this may just last for a short period of time. In fact, your credit score has a chance to rebound and even improve in the longer term, especially if you pay your new monthly repayments on time.

There are several factors that can impact your credit score, including when a credit provider obtains a copy of your report during your credit application. Whilst each of the Australian credit reporting bodies calculate credit scores differently, making multiple applications within a short space of time can negatively affect your credit score. Find out more in our quick guide to understanding your credit report.

If you have a below-average credit score, then refinancing could still be an option for you. However, you may need to look to alternative lenders that take a holistic view of your financial situation. Non-bank lenders like us at Pepper Money specialise in providing loan options for people with credit history issues, and we can help you explore your options.

Even if you have a bad credit rating or a limited credit history, we may be able to help you reduce your interest rate and combine all your existing debts together into one easy to manage payment. It’s important to understand what factors have impacted your credit score in the past and ensure that you have a plan in-place to sort these issues out. Check out our tips on understanding your credit score.

To know the full costs, you need to look at the terms and conditions of each product – then you can compare them. So, the loan you currently have, compared to the one you’re considering refinancing to. Make sure you understand the fees and charges to both discharge an existing loan and to get a new mortgage, as they will differ from lender to lender and product to product. It’s important to also understand the terms and conditions, including any fees, applicable where you’re considering refinancing with your current lender to a different product. Before making any decisions, read the fine print to make sure your refinancing benefit isn’t being eaten up by fees or break costs. If unsure, you can also speak to a professional adviser who can help give you qualified financial advice.

Break costs or exit fees are additional costs that can be charged to a borrower when they switch home loans to a different lender or refinance with their existing lender. These fees are there to make sure that lenders are financially protected and can cover any costs if a loan is refinanced or switched to another lender during a fixed interest rate period. Different lenders may use different methods to calculate break costs, however it usually depends on how much of a locked-in rate period is remaining, how much of the loan amount has been paid off and the difference in cost of funds.

At Pepper Money, our fixed rate offering comes with no break costs, meaning you can gain the certainty of locking in your repayments for a set period of time, and should rates decrease in the future, you can refinance, or ‘break’ the loan during the fixed rate period without any penalties. 

When refinancing your home loan with us, we can finance up to 90% of the property’s value. This means you’ll need to maintain at least 10% equity or contribute an equivalent deposit to your loan.

Remember, you’ll also need funds to be able to cover any loan fees, as well as government and legal fees. These can’t be added to your home loan balance.

Debt consolidation involves taking out a single loan to consolidate multiple debts, such as credit card debts, student loans, and other outstanding loans. It’s an option that could help you better manage your debts. By consolidating multiple debts into one loan, you may benefit from lower monthly payments, reduced, or eliminated late fees, and the convenience of having just one loan to manage. 

Consolidation loans are available from both banks and non-bank lenders, each will have different terms and conditions. Deciding the right lender for the right borrower will depend on their individual circumstances. It’s important to compare the costs and benefits of each loan provider and choose one that meets your needs.

If you have equity in your home loan, you might be able to leverage it to consolidate other debts into your loan.  

One benefit of consolidating non-property debt into a home loan is that you can often get a lower interest rate. Because you will be putting your home up as collateral, lenders will usually offer lower interest rates than they would on other types of loans.

If you are looking to refinance your loan in Australia, you may need to pay stamp duty. This is generally a one-off fee charged by a State or Territory government on certain types of transactions. It is important to check with the relevant State or Territory Stamp Duty Office if stamp duty applies in your particular situation.

Being self-employed doesn't mean that you can't own your home. The big banks can make it difficult for self-employed workers to get a home loan, often requiring them to jump through extra hoops or labelling them as too high-risk. As a non-bank lender, we specialise in self-employed home loan options. We're here to help those with non-standard incomes – including those with only 6 months of ABN and GST registration.

We take a careful look at both your personal and business cash flow to ensure that you can comfortably make your regular home loan repayments. Depending on the level of documentation that you can provide, self-employed borrowers generally fall into two categories: full doc or alt doc.

There are two types of income documentation options available: full documentation (Full Doc) or alternative documentation (Alt Doc).  

For Full Doc:

• Last one or two years’ tax returns and notice of assessments, or  
• Last one or two years’ financial statements executed by a registered tax agent or accountant  

For Alt Doc:

• Evidence of GST and ABN registration for at least 6 months, and  
• Declaration of financial position plus one of the following: 

• • 6 months of business bank statements, or 

  • 6 months of lodged Business Activity Statements (BAS), or  

  • Pepper Money accountant’s letter (eligibility criteria apply).  

Please note: the exact documentation required will be dependent on a full review of your situation. 

For a full breakdown of what’s needed and when, check out our home loan application checklist – it’s a simple way to feel confident and prepared.

If you're self-employed and are looking at applying for a home loan, it can be challenging due to the lack of a fixed income that many lenders require as part of the process. However, non-bank lenders like us at Pepper Money may still be able to help you with our flexible approach to self-employed home loan options.

All lenders look at your finances, business turnover, and credit history to determine your ability to repay the loan. Providing evidence of income is important and typically includes bank statements, ABN and GST registration that will be reviewed to assess your ability to manage the loan. 

Committing to a larger deposit could also increase your chances of securing a self-employed home loan and reduce interest charges. 

If you work for yourself or fall under the category of “self-employed”, applying for a home loan can be quite a challenge even with regular income. All lenders will need to establish your income, assets, savings, and financial capacity to pay back a loan before considering your application. They may also look at the financial position of your business. Unfortunately, many mainstream lenders, like the banks, see self-employed people as high-risk borrowers. But this does not necessarily mean you cannot qualify for a home loan. When you're self-employed, you might need to look beyond the big banks to the non-banks like us at Pepper Money for a lending solution.

Here are some tips and tricks to help get your loan application approved.

If you’re self-employed, you’ll need to first get your indicative interest rate^˅. If eligible, you’ll be able to apply online. Alternatively, call us on 137 377 or leave an enquiry online.

Also known as adverse credit, bad credit occurs when you’ve had a history of not keeping up with payments on your credit agreements. This then impacts your ability to get approval for a home loan or other new lines of credit.

Many lenders consider borrowers with a bad credit history to be a high lending risk, as they’re concerned with the borrower’s ability to commit to regular repayments on a new loan.

There might be home loan options available to you, even if you’ve had issues with your credit. While some traditional lenders may turn you away, non-bank lenders like Pepper Money take a more holistic approach. They look beyond credit scores to understand your financial situation, needs, and individual circumstances.

If you’d like to learn more about our home loan options for bad credit, speak with one of our friendly lending specialists at 137 377 (option 2).

Real life happens and that shouldn’t hold you back from achieving your financial goals.

While every situation is different, we do have home loan options for borrowers who’ve been previously bankrupt or are currently under a Part IX or X debt agreement. Talk to one of our lending specialists on 137 377 about your situation and we’ll see if we can help.

Most lenders ask for a deposit of 10–20%. At Pepper Money, we can consider applications up to 95% LVR (including fees). That means you could get started with as little as 5% deposit plus fees, depending on your situation.

Interest-only periods typically run for 1–5 years. With Pepper Money, you can choose an interest-only term of 1–5 years, provided it fits within your overall loan term of 10–40 years and meets your requirements and objectives. After that, the repayments will switch to principal and interest to payout the loan balance over the remainder of the loan term.

A home loan is for buying a property you plan to live in, while an investment loan is usually for a property you’ll rent out. Investment loans may have different interest rates, lending criteria, and fees.

Yes, you can. If you’ve built up equity in your current home, you may be able to use it as a deposit or security for buying a second property. It can be a common strategy for investors looking to grow their property portfolio and may not need a cash deposit.

Definitely. Renting out your home changes its status from owner-occupied to investment, which can impact your loan and insurance. Keeping your lender in the loop helps avoid any surprises.

Yes, it’s important to let your lender know if your living situation changes. Moving into an investment property can affect your loan terms.

The cost of an investment property depends on location, size, and market conditions. Beyond the purchase price, you’ll also need to budget for stamp duty, legal fees, maintenance, insurance, and other ongoing costs.

The right loan depends on your goals and your situation. Some investors prefer interest-only loans to maximise cash flow, while others choose principal and interest loans to help build equity faster. It’s worth speaking with a lender or broker to find a loan that suits your circumstances.

If you’ve built up enough equity in your current home, you may be able to use it as security for your next purchase. This could mean you won’t need a cash deposit, but you’ll still need to meet lending criteria, credit assessment and lending limits.

Negative gearing is when the expenses of owning an investment property – like loan interest and maintenance – are higher than the income it generates. The loss can sometimes be claimed as a tax deduction, which may help reduce your taxable income. Learn more about negative and positive gearing here. 

We’re one of Australia's leading non-bank lenders! 

We were established way back in 2000 to help Australians achieve their financial dreams by providing flexible financial loan options that could factor in the ups and downs of real life. Since then, we’ve become one of the largest, most trusted, and award-winning non-bank lenders in Australia and New Zealand. 

No, Pepper Money is not a bank. It is one of the largest and most trusted non-bank lenders in Australia and New Zealand.

What is a non-bank lender? A non-bank lender is a finance provider that isn’t a bank. Unlike banks, non-bank lenders do not take deposits from customers. Instead, they fund their loans by pooling together debt and selling it to institutional investors.

Learn more about non-bank lenders.

Unlike banks that often fund loans through deposits placed by other members or customers, being a non-bank lender means we fund our loans a little differently. We fund our loans through a process called securitisation. This means we essentially bundle up several mortgages together and then place them on global debt capital markets to allow investors to fund them. This is all done behind the scenes and won’t have any impact on your loan with us.