What are Online Home Loans?

In 2021, online or digital lending is becoming more popular. Here we cover all the details of an online home loan and the pros and cons of getting your home loan online.

Article published 29 September 2021

What is an online home loan? 

An online home loan, also known as a digital home loan, is a type of loan that is offered completely online, including the application process. They are usually offered by digital lenders and allow you to go through the application process online with no physical documents and without needing to attend a branch.  

Online home loans can be applied online directly with a lender that offers this type of product or through a Mortgage Broker who can go through the online application with you. An example of an online home loan would include Mortgage Choice’s Propel

Why and when should you get an online home loan?

Online home loans can be versatile and are usually available for people in many different scenarios, offering solutions for first home buyers, investors and even people looking to refinance their existing home loan. 

Of course, it is important to understand that online home loans do not provide branch services or personal face to face meetings. You will also need to be comfortable in using the internet for your banking and carrying out the application process alone. 

If you are interested in an online home loan but don’t want to go through the application process alone, a mortgage broker can help you with expert advice throughout the process and do all the legwork in finding and applying for the right home loan for you - whether that is an online home loan or not. 

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What are the pros of an online home loan?

Despite online home loans being a fairly new introduction to the financial industry, there are many benefits to consider when looking at applying for an online home loan: 

  • Simplified application process: as the entire process is online, there is less of a hassle for going into a bank location to sign documents or verify id in person, all documentation and verification can be done online and in the comfort of your own home. 
  • Competitive interest rates: Many online lenders are able to offer low interest rates due to having less overhead of running branches and using advanced technology to process applications more efficiently. 
  • Advanced online banking platforms and mobile apps: As online lenders tend to showcase their online services, there is more investment provided to their online banking experience and customisable features with mobile apps.

What are the cons?

Whilst there are many benefits to go with online home loans there are of course some risks to consider: 

  • Lending guidelines: Many online lenders have a stricter lending policy and are less likely to approve home loans with higher perceived risk to the lender. This can include applicants with a high LVR (less than 80%), low credit score and in some cases loans for regional properties. 
  • Limited products/features: As online home loans are still a new product, they do not cater to all types of borrowers as not all home loan types are available. For example online home loans are not available if you are self employed or require a low doc home loan or construction loans
  • Less assistance in application process: As mentioned above, when applying for a home loan online you will not have the same service you can get with a traditional lender and will need to navigate through the process independently. However, you are able to apply for an online home loan through a mortgage broker if you’re still looking for a more personal experience when getting a home loan.

Does Mortgage Choice offer an online home loan?

Mortgage Choice offers an online home loan product - Propel. Propel is a completely digital product that can provide a verified home loan approval in 15 minutes1 due to its online verification process. Despite being a completely digital home loan, Propel is still able to provide a tailored solution to fit your specific circumstances, including personalised interest rates.2 

If you are interested in applying for a Propel home loan you can do so with a Mortgage Choice broker who can discuss your situation and assist you with your application every step of the way. 

Get a Home Loan Quote Online

Before shopping around for a home or investment property, it's a good idea to learn what your borrowing power is.

If you’re looking to get a home loan, you can find out how much you can borrow and the costs involved using our free online home loan quote tool.

Posted in: Home loans

1 Eligibility criteria and terms and conditions apply. Approval times are not guaranteed. Propel may not be suitable for everyone, your broker will advise if there is a more suitable home loan product for your circumstances. Verified approvals are subject to all required financial information being provided, financial position and the security property.
2 Interest rate provided is subject to financial position and the location of the security property.