Do you have bad credit and wondering whether you can get a home loan in Australia? Yes. You can get a home loan even if you have bad credit. The average Australian gets a home loan with a clean credit score. However, there are many people with poor credit scores who don’t have this option. Luckily, there are many lenders who specialize in providing home loans with bad credit in Australia. Bad credit home loans usually have a higher interest rate compared to normal loans.
What is a Bad Credit Score in Australia?
- The average credit score or Equifax score in Australia is 550. Therefore, a credit score below 500 is considered a bad credit score. Also, a credit score below 400 is considered a very bad credit score. A credit score is a figure that is used to determine a borrowers’ creditworthiness. It is used by lenders to determine if the borrower is in a position to repay a loan.
- 1 What Credit Score Do I Need for a Home Loan in Australia?
- 2 Can you Get a Home Loan with Bad Credit in Australia?
- 3 How to Buy a House with Bad Credit in Australia
- 4 Home Loan for Bad Credit in Australia
- 5 What Bank will Give me a Home Loan with Bad Credit?
- 6 Home Loans with Bad Credit and No Deposit
- 7 Crypto Home Loan in Australia
- 8 Summary of How to Get a Home Loan with Bad Credit in Australia
What Credit Score Do I Need for a Home Loan in Australia?
The minimum credit score you need to get a home loan in Australia is 620. Someone with a credit score below this may struggle to get a home loan in Australia. The average good credit score to get a home loan ranges between 620 and 700. With a credit score in this range, you can easily get a home loan with low-interest rates.
Can you Get a Home Loan with Bad Credit in Australia?
Yes. There are many lenders in Australia that specialize in bad credit loans and can help you get a home loan. However, you will repay the loan with a little higher interest rates and higher upfront fees. You may also need to save a deposit greater than 20% of the value of your home.
How to Buy a House with Bad Credit in Australia
If you have a bad credit score, I know you must be wondering; can you buy a house with bad credit in Australia? Yes, you can. To do so, you need to follow the following steps:
- Get a copy of your credit file. Before borrowing a home loan, your prospective home lenders will need to look at your credit history.
- Settle your outstanding debts. The other thing that you need to do is to settle all the debts you currently have. New lenders will want to know if you are taking steps to address your past debts.
- Apply for a home loan from a reputable lender. The other thing that you need to do is to find a reputable lender who looks beyond your credit score. Bad credit can be a result of life challenges like job loss or divorce.
- Do not apply for a home loan with a partner with bad credit. If your partner has had bad credit, including them when applying for the loan can lead to your loan rejection. Also, it may lead to high-interest rates.
- Pay off your other debts. You need to pay off your other debts to make your credit file look appalling to lenders. If you can pay off these loans before applying for a loan will help you find a home loan with low-interest rates.
Home Loan for Bad Credit in Australia
You can get a home loan with bad credit rating in Australia from the following lenders:
Pepper Money is a home loan for bad credit in Australia. It is a flexible home loan that comes with non-fixed interest rates that are matched with individual circumstances. They have carrying home loan types for people with varying interest rates. If you have a bad credit score, you can get a loan with an interest rate ranging between 4.29% p.a and 4.59% p.a.
Savvy is a home loan with bad credit in Australia. If you have been rejected a home loan because of bad credit score, you can get one here. The lender uses the latest technology whole process loan applications hence a faster approval rate. Banks and other lenders charge high-interest rates for bad credit home loans. But with Savvy home loan, if you can demonstrate good banking habits and low debts, it can help you reduce your loan interest rates. They accept defaults that are registered less than 12 months ago.
Liberty is an Australian lender that can help you get a home loan. You can get a credit discount of 1/8% when you pair your mortgage loan with your Liberty checking account and debit card. You can get up to $500 gift card when you spend anywhere on closing of your purchase or construction loan. They offer two types of loans: Liberty Sharp with APR of 2.59% and Liberty Star with APR of 2.69%.
Red Rock is also one of the best home loan with bad credit rating in Australia. If you apply for a loan with them, you will have a great chance of getting approved with bad credit. They have qualified and experienced lending managers that will provide you with the best advice to pick the best home loan. They specialize in mortgages for people who need loan flexibility.
What Bank will Give me a Home Loan with Bad Credit?
Getting a home loan with bad credit from a bank in Australia can be challenging. Many traditional banks do not accept people with bad credit, but you can still find some banks that will give you a loan. However, they charge high-interest rates. The following are some banks that will give you a home loan with bad credit in Australia.
Bendigo Bank Express
You can apply for a home loan online from Bendigo Bank Express and get a loan with competitive rates and flexible terms. The repayment options are also flexible and have fast approval. You can get invest home loan, express hone loan, and home loan refinancing.
Beyond Bank Australia
Beyond Bank Australia is one of the best low credit score home loans Australia. They offer a variable home loan rate for new owner-occupied home loans with an interest rate of 2.04%. you can apply for the loan online while you can also get a repayment holiday. You can get up to 60% value of the property with a loan term of up to 30 years.
Home Loans with Bad Credit and No Deposit
What is a no deposit home loan? A no deposit home loan is a home loan where you get approved for 100% of the home value without paying a deposit. A guarantor home loan is one of common and less risky options for no deposit home loan. This is when you use someone else’s property as collateral (such as your parents or a close relative). In this case, there wont be any money to be paid as a deposit.
Generally, when buying a home in Australia, you need to pay a deposit. Deposit amount may start from as low as 5% of the purchase price. Depending on the lender, other costs may be included such as Lender’s Mortgage Insurance and Stamp Duty. It’s extremely hard to find a home loan with bad credit and no deposit. No deposit home loans in Australia and other parts of the world have very strict eligibility criteria.
Crypto Home Loan in Australia
Crypto mortgage has not been fully accepted in Australia. Crypto mortgage is a fairly new concept worldwide. We are not aware of any company that offers crypto mortgages in Australia at the moment. However, you may be able to find individuals accepting cryptocurrency for a house as it happened in 2019 and 2020 in Australia.
Summary of How to Get a Home Loan with Bad Credit in Australia
Although it can be challenging to get a home loan with bad credit in Australia, it is still possible to get one. if you have been rejected. Some loans may require you to make a deposit while others will not. There are several home loan bad credit first time buyer in Australia that can help you. Make sure to service your existing debts to have a clear credit score to increase your chances of getting approved.