UBank is an online-only bank – a neobank – owned by National Australia Bank (NAB), one of Australia’s Big Four banks. It launched in 2008 with online savings accounts and added low interest home loans in 2011. Today they offer savings accounts, transaction accounts and term deposits, as well as home loans.
Because it’s an online-only bank, there are no branches and no face-to-face customer service to guide you through the application process, but it’s a speedy way to access a low interest rate for tech-savvy applicants with a big enough deposit.
Product and service offerings
UBank has variable rate home loans and fixed rate home loans for both owner-occupiers and investment properties, on a principal and interest or interest-only basis. You can get a maximum of 85% Loan to Value Ratio (LVR), without having to pay Lenders Mortgage Insurance (LMI), for owner-occupier loans, and up to 80% LVR for investment property loans.
Since UBank does not offer loans with LMI, this means you must have a deposit of at least 15% (20% for investment properties).
UBank variable rate home loans
- No application fee
- No ongoing fees
- Flexible repayment on weekly, fortnightly or monthly basis
- Interest-only loans available
- Split loans up to four times
- Loan term 30 years
- No offset account
- Unlimited additional repayments and redraws
UBank fixed rate home loans
- Fixed rates for 1, 3, or 5 years
- Application fees waived till 30 September 2022
- No ongoing fees
- Flexible repayment on weekly, fortnightly, or monthly basis
- Interest-only loans available
- Split loans up to four times
- Loan term 30 years
- No offset account
- No additional payments are allowed without incurring break fees
Why UBank home loans are different
- Simple, easy online application process
- Online banking and online application tracker
- Competitive interest rates
- No application, ongoing or annual fees on variable rate loans
- Application fee on fixed rate loans waived until September 2022
- Unlimited additional payments and redraws on variable rate loans
Record on rate cuts
UBank has a good record of passing on RBA rate cuts, as well making additional rate cuts, to both variable and fixed rate loan customers.
Eligibility
UBank loan eligibility depends on fulfilling the following requirements:
- Be at least 18 years-old
- Be an Australian citizen or Australian permanent resident or New Zealand citizen
- Have an Australian mobile number (joint applicants need separate numbers)
- Have an email address (joint applicants need separate addresses)
- Have a regular income, which can be PAYG income or self-employed income if a sole trader or in partnership
- Be planning to buy or refinance an established property (house or unit), of at least 50sqm
- Have at least 15% deposit (20% for investors)
Documents you will need
- ID documents
- Copy of either driver’s licence, or passport photo and details page
- Proof of income
- For PAYG employees: Two recent payslips less than 45 days old, showing income (including details of overtime, commission and bonuses if applicable) and employer details
- For self-employed: Last two years personal and business tax returns and assessments
- For rental income: Four weeks’ rental receipts issued by real estate agent, or copy of tenancy agreement plus bank statement showing rental credits
- For government benefits: Centrelink Statement of Benefits and/or six consecutive months of bank statements showing family tax payments
- Child support/maintenance: Copy of Child Support or Maintenance Agreement and six consecutive months of bank statements showing child support or maintenance credit
- Assets
- Details of any property or other assets you already own
- Liabilities
- Details of existing loans, credit cards and rental commitments
- A detailed list of your living expenses
- Property purchase documents
- Signed contract of sale
- For property investment loans: Lease agreement confirming rental income, or real estate agent’s assessment of market income
- If refinancing: Six recent consecutive months of existing home loan statements
Pros and cons
Here are the pros and cons of UBank home loans.
Pros
- Online banking with AI-enabled chatbot and home loan processing
- Online application tracker
- LMI waivers on loans up to 85% LVR on owner occupier home loans, and up to 80% LVR on investment loans
- Refinancing loans up to 80% LVR
- Competitive interest rates
- Lower interest rates for larger deposits
- No ongoing or annual fees
- No application fees on a variable rate loans
- Application fee waiver on fixed rate loans (until September 2022)
- Unlimited extra payments and redraws on variable rate loans
- Split rate loans available, up to four times
- Interest only loans available
Cons
- Maximum LVR is 85%, since LMI cover is not used
- Strict on documentation required
- No physical branches or in-person advice
- No mortgage offset accounts
- No construction loans
