flagFounded: 2008

businessOwned by: NAB

monetization_onFunded by: Advantedge (NAB)

securityLMI Provider: Genworth & QBE LMI

account_balanceLender type: Online Bank

UBank was launched with much fanfare despite the fact that CBA‘s online bank HomePath had been shut down just a few years before. UBank began with online savings accounts before launching its low rate home loans in 2011.

The main problem with UBank is that very few people are actually eligible for a UBank home loan and without guidance, it can be hard to organise your documents to get approved for a home loan.

UBank is ideal for 40 – 50 year olds with significant equity who are tech savvy and would like to refinance their home to a better interest rate.

How do UBank’s home loans compare?

They’re great at

But they’ve got some drawbacks…

  • You can usually get the same interest rates through other lenders
  • It takes time to transfer money between UBank accounts and a UHome Loan
  • They don’t lend over 80% of the property value
  • They don’t approve loans to purchase a property
  • Offset accounts not offered
  • They don’t approve loans for self-employed borrowers
  • They don’t do construction loans
  • The security property must be standard and in the names of all borrowers
  • No branch access
  • The percentage of applications that actually get advanced is very low

Is online really cheaper?

We’re so used to buying things online and thinking that it’s a better deal because there’s no shopfront and they need less staff.

Unfortunately home loans work quite differently to a credit card or personal loan application. They’re more complicated, require more documents and have strict regulatory requirements.

Lenders like ING that have online home loans actually have a call centre in the background that puts the applications together so they can be processed and approved.

UBank is a call centre not an online bank. It works in the same way as ING and this additional staff cost, not to mention their advertising and their low conversion rate, means they actually don’t get the cost savings that NAB hoped for.

Bait and switch

The standard business model used by lenders in Australia is pretty simple to understand. They offer a low interest rate that’s unsustainable, lots of people apply and then a year later they put the rate up, grandfather the product and come out with a new loan that only new customers can apply for.

UBank offered term deposit and home loan rates that were almost on top of each other. Clearly if you lend money out at the same price that you borrow it at then it’s unsustainable. Now they’re on par with the other banks negotiated discounts and the customers that joined them aren’t actually better off as they don’t even have an offset account.

Watch your interest rate!

If you do have a UBank Home Loan then put a reminder in your calendar to review your rate once a year. If your rate is no longer competitive, then challenge UBank to match other lenders’ offer. If they don’t then refinance to get a better deal.

Our mortgage brokers monitor the interest rates for our clients home loans, free of charge. If you’d like us to help with your home loan then call us on 1300 889 743 or complete our free assessment form.

What home loans types do UBank have?

The Variable UHomeLoan is a basic variable home loan with no application or administration fees and has a low variable interest rate. It’s main drawback is that it has no offset account, however it’s a good choice if you don’t have much money sitting in your cheque account.

The Fixed UHomeLoan offers a fixed rate for up to 5 years and automatic rate lock for a fee. Fixed interest rates change most months depending on the cost of funds and in some cases UBank has great fixed rates, but most of the time another lender has a special offer which has a lower rate.

Tips for applying with UBank

The key to getting a fast and simple approval is to provide all of your documents in one go!

If you give 9 out of 10 of the documents that they need then your loan application will sit on hold until you provide that last document. If your payslips or loan statements are more than 6 weeks old then this will also delay your application.

Provide exactly what is needed in one go and you should have no problems.

Use UBank’s Uhomeloan document checklist to prepare for your home loan application.

Note: This is the latest home loan checklist effective July 2017. Please refer to UBank for their most up-to-date document requirements.

Compare UBank to other lenders

Not sure which lender is right for you? Our Home Loan Experts can help!

Talk to one of our mortgage brokers by calling us on 1300 889 743 or complete our free assessment form.

  • Vickery

    I actually wanted to refinance because my mortgage is in arrears but UBank declined my loan application. Which other lender can I go with now?

  • Hey Vickery,

    You may try applying with a specialist (sometimes referred to as a non-conforming lender) for 1 to 2 years for now. There are some specialist lenders that don’t look at your credit history at all and assess your loan based on its merits, however, you’re likely to have to pay a higher interest rate. After you’ve fixed your credit issues by paying off your debts, you can switch to a major bank or lender. Please call us on 1300 889 743 to speak with one of our mortgage brokers about this.

  • crystal

    So UBank is an online lender and I get pretty much what that’s about. Aren’t you guys an online mortgage broker? Does this mean access to lenders is lower?

  • Hi crystal,
    Banks and lenders don’t discriminate against mortgage brokers whether they’re online or not. The broker simply needs to be accredited with that bank in order to write a home loan with them. This means that you can still access the same lenders. Most banks see the benefits of the online broking model, especially brokers that have strong systems in place to provide clean and well-packaged home loan applications.

  • JJohnson

    I’ve not decided anything yet but if I do get an offset account, how much can I expect to pay for it? Will I need to be borrowing at a certain amount or something? I know UBank don’t have that and it’s okay so just wondering.

  • Hey JJ,

    Actually, a 100% offset account is available to anyone regardless of the amount of money they wish to borrow. Also, there are no account keeping or hidden fees associated to this type of home loan so it won’t necessarily cost you any extra. As a general rule though, we find that dual income families with high monthly expenses tend to benefit the most from an offset account as they need the most funds available for their day to day spending. You can check out the 100% offset account page if you’d like to learn more about this: