businessOwned by: Customer-owned
monetization_onFunded by: Retail deposits and wholesale capital markets
securityLMI Provider: Genworth
account_balanceLender type: Credit union
Bank Australia is not an available lender on our panel. This is a review only.
Changing its name from BankMecu in 2015, Bank Australia is the country’s first and largest credit union following the acquisition of a number of smaller customer-owned banks over many years.
Where Bank Australia falls short compared to other credit unions is with the high upfront and ongoing costs that typically apply to their home loans.
How do Bank Australia home loans compare?
- Low deposit home loan solutions
- Good customer service
- Competitive interest rates and discounts when borrowing more than $700,000
- Low interest rates on their SMSF limited recourse loan
- 100% offset account and redraw available
- They have an Australia-wide ATM and branch network
- Discounts available when bundling products together
- Good for refinancing to basic loan package
- Can do bridging loans
- No valuation and establishment fees
- Can lend to zoned rural residential properties up to 10 hectares
- Accepts owner-builders
- A sensible approach to lending to casual employees.
- Can go up to 95% with LMI for first home buyers
- Annual fees can be high compared to some other lenders on the market
- Large establishment fees apply on some of their home loan packages
- Investors need a large deposit, typically 20% of the purchase price
- Line of credit is only offered to existing customers
- Early exit fees apply to some of their products
- Non-resident mortgages are limited to owner-occupiers only
- Foreigner mortgages are only accepted on a case by case basis
- Can’t do reverse mortgages
What home loan products does Bank Australia offer?
Bank Australia offer the following packages:
Basic Home Loan: Offers a competitive interest rate with flexible repayments and redraw.
A 100% offset account against fixed-rate home loans.
Premium home loan package: A fully-featured home loan that has discounted rates and fee waivers.
Line of Credit Loan: Access the equity you’ve built up and is available for both investment and owner-occupied loans.
Bridging home loan: A 12-month loan term, available for purchase or construction prior to the sale of an existing property.
For both of its premium packages, the credit union offers a fairly significant interest rate discount when borrowing $700,000 or more. This discount then reduces slightly when borrowing between $400,000 and $700,000.
What does ‘responsible lending’ mean to Bank Australia?
Bank Australia has been a carbon-neutral bank since 2011.
It is the first bank in Australia to have its home loan products certified as “responsible” by the Responsible Investment Association of Australasia.
Bank Australia is committed to never invest industries involved in fossil fuels, live animal export, gambling, arms industry and tobacco.
They want to create a positive impact for the people and the planet and will lend to better housing developments, renewable energy projects, housing for people with disability and not-for-profit organisations.
As a customer-owned bank, Bank Australia’s profits don’t go to shareholders but instead go back into building better home loan products at competitive interest rates.
Apart from that, the credit union actually invests a portion of those profits to the Bank Australia Impact Fund and Conservation Reserve, the latter helping to stem the devastating effects than building and construction can have on biological diversity and vegetation in Australia.
Tip for applying with Bank Australia
Use Bank Australia’s supporting documents list to prepare for your home loan application.
Note: This is the latest document checklist as at March 2017. Please refer to Bank Australia for their most up-to-date document requirements.
Compare Bank Australia to other lenders
There are a lot of lenders to choose from, including non-banks like Bank Australia, to second-tier lenders and major banks.
Where do you start?
Every day, more and more Australians are turning to a mortgage broker to compare lenders and help them to choose the right home loan product for their situation.
Speak with one of our specialist brokers today by calling us on 1300 889 743 or complete our free assessment form and we’ll get back to you to discuss your options.