ubank Home Loans

ubank offers three home loan product lines: ‘Neat’ variable, 'Own' variable, and fixed products. According to InfoChoice market research, ubank home loans offer relatively competitive interest rates compared to those offered by other lenders.

ubank home loan review

ubank’s home loan products are available to all sorts of property buyers or owners, including owner-occupiers, investors, refinancers, and first home buyers. However, it does impose notable limits on eligibility and the type of property a person can buy.

What home loans does ubank provide?

ubank has a tight array of home loans on the market. Its three home loan products are its: Neat variable, Own variable, and Own fixed. The bank also allows a person to split their home loan between fixed and variable, potentially getting the best of both worlds.

Neat variable

The bank’s Neat variable home loan has a variable interest rate, meaning a person’s repayments will be impacted if interest rates were to rise or fall. The rates tend to be the most competitive in ubank’s line up, but this product doesn’t allow a borrower to have an offset account. However it does offer a redraw facility and doesn’t charge annual fees.

Own variable

Its Own variable home loan product also offers a variable interest rate, and also allows borrowers to hold multiple offset accounts in the form of Spend or Save accounts (the bank’s transaction and savings accounts). Save accounts used as an offset won’t provide interest.

An own variable home loan comes with a $250 annual fee.

Own fixed

As the name suggests, ubank’s own fixed home loan product allows a borrower to lock their interest rate in for as long as five years, thereby assuring steady repayments.

Those with a fixed home loan can make up to $20,000 of extra repayments within their fixed rate period and redraw their extra repayments if needed.

Like its variable sibling, the Own fixed home loan carries a $250 annual fee.

What kind of properties can you buy with a ubank home loan?

ubank only offers home loans for certain types of properties that meet select criteria. For one, it will only lend to a person buying or owning a liveable property that is fully constructed, connected to power and water, and used for residential purposes.

That means people hoping to buy vacant land on which to build, or with more than three months left on their off-the-plan home building journey aren’t eligible.

It also won’t lend to a person buying a strata title hotel, motel, or resort style dwelling, a stratum title property, or a company share property. The majority of houses in Australia are freehold title, which the bank will lend for.

On top of that, it won’t fund the purchase of student accommodation, studio apartments, apartments smaller than 40 square metres, or properties larger than 25 acres (10 hectares).

How big of a deposit do you need to get a ubank home loan?

Another way in which the neobank differs from many of its larger competitors is by the loan-to-value ratio (LVR) it will accept. Many Aussie banks will allow a buyer to snap up a property with a 5% deposit, as long as they pay lenders mortgage insurance (LMI).

ubank, however, allows owner occupier home buyers to shirk LMI if they have a 15% deposit or 85% LVR (it remains at 20% deposit/80% LVR for investors). However the interest rates on these products might be notably higher than 80% LVR products.

Who is eligible for a ubank home loan?

ubank is also relatively strict on to whom it will lend. Like the majority of Aussie banks, it asks applicants be 18 years or older, an Australian or New Zealand citizen, or an Australian permanent resident, and have a good credit rating. Borrowers also need to live in Australia and be listed on the property title.

However, it won’t lend to self-employed borrowers or provide loans to those applying alongside more than two people. Those two people also have to be spouses or de facto partners that either live together at the time of applying or plan to live in the house they’re buying – it won’t provide loans to a pair of siblings or a parent and child, for instance.

On top of that, at least one applicant must be receiving PAYG income. The bank will also consider rental or investment income and certain Australian government payments as income.

Applying for a ubank home loan

For those among us that despise paperwork, rest assured ubank’s home loan application is entirely online. Though, would-be borrowers can also choose to chat to the bank over the phone.