Launched in May 2022, Unloan has found its niche in the market offering simple, low-rate variable home loans that come with an annual ‘loyalty discount’ and access to online support.
Initially developed by CommBank’s x15ventures and now a division of CommBank, Unloan says it’s able to move at the fast pace of a fintech while also benefiting from the back-end banking, payments, and compliance services of Australia’s largest bank.
Unloan offers variable-rate loans only, with no fixed-rate options, both for owner occupiers and investors. All borrowers must make principal and interest (P&I) repayments.
Notably, Unloan loans come with no fees and no penalties (see more below) although borrowers with loan-to-value ratios (LVRs) between 80-90% may be required to take out Lenders Mortgage Insurance (LMI).
Unique annual discount
In a rare feature on the home loan market, for every year a customer holds an Unloan home loan, they receive an additional discount of 0.01% off their current interest rate, up to a maximum discount of 0.30%.
CEO Daniel Oertli says Unloan’s underlying principle is that home loans should be simple to get and easier to live with.
As such, Unloan’s table of home loans is suitably straightforward:
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% | Apply in minutes |
| Promoted | Disclosure | |||||||||
6.29% p.a. | 6.20% p.a. | $3,092 | Principal & Interest | Variable | $0 | $0 | 80% | Apply in minutes |
| Promoted | Disclosure |
Streamlined application process
Unloan says its application process is also simple.
“No one likes paperwork, no one likes waiting for a long period of time, so Unloan has been built specifically to offer a great rate with a discount that increases every year, but also a streamlined application process,” Mr Oertli says.
“The application process is one of those linchpins. We aim to constantly work on making it faster and faster.”
The digital application process is designed to be completed at customers' convenience, typically “taking minutes”, according to Mr Oertli.
An Unloan lending specialist then begins the assessment process. Currently, if you submit an Unloan application before 3pm AEST, a lending specialist will contact you by the end of the same day. If you submit after 3pm, it will be the next business day.
If you need an update on a more involved application, Unloan provides online tools to check on the progress of your application.
“We’ve focused on simplifying the home loan process and providing customers with the tools, guidance, and confidence to navigate their refinancing or home buying journey with ease,” he says.
Unloan fees
Another major feature of Unloan home loans is that Unloan does not charge fees on a standard home loan, meaning customers won’t pay any application, discharge, account keeping, or transaction fees. (However, there may be other third-party fees and government charges, and if you're refinancing, your current lender might charge you an exit fee.)
See also: Navigating home loan fees
There are also no penalties for additional repayments, redrawing, late payments, or early termination of an Unloan loan.
Borrowers can choose weekly, fortnightly, or monthly repayments and can redraw any amount above their minimum scheduled repayments for no fee. It’s also worth noting Unloan does not currently offer offset accounts with any of its loans.
Unloan eligibility
Unloan currently accepts applications to refinance home loans up to $10,000,000 at up to 80% of the property’s value or up to 90% of the property’s value if you’re looking to purchase a property.
To be eligible for an Unloan home loan, you’ll need to meet the following requirements:
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Be over the age of 18
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Have an eligible form of identification such as a valid Australian state/territory Driver Licence or an Australian Passport
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Ensure all borrowers on the loan application have good credit history that meets Unloan’s policies
See also: How does a credit score work?
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Receive regular income and are able to provide acceptable documents to verify your income and expenses e.g. payslips and banks statements
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Either be refinancing an existing home loan or looking to purchase a property
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If you’re refinancing, the home loan must be for 80% or less of the value of the property and is between $10,000 and $10,000,000, or up to 90% of the property’s value if you’re looking to purchase a property.
Required documents
Aside from the traditional forms of identification, Unloan also requires:
Employment Income
If you’re employed on a PAYG basis, you’ll typically need to provide one or more of the following documents:
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Your most recent payslips
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Your bank statements from the last three months, with evidence of permanent employment base salary, allowances, overtime and bonuses, or
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Your bank statements from the last six months, with evidence of commission, casual, temporary, and seasonal income.
Self-employed income
In all cases, your business will need to demonstrate it has made a profit in each of the two most recent financial years by providing the following:
Sole Trader & Partnership:
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Your personal tax returns from the two most recent financial years
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Your most recent Notice of Assessment (NOA)
Company:
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Financial statements from the two most recent financial years, or a letter from your accountant on the company letterhead dated in the last six weeks advising that the business made a profit in the two most recent financial years.
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Your personal tax return from the most recent financial year and your most recent Notice of Assessment (NOA), or
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Your personal bank statements from the last six months, showing regular and consistent payments of income from your business
Rental income
Unloan will need one of the below:
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For short-term rentals: Your bank statements from the last six months, or statements from your property managing agent from the last six months.
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For long-term rentals: Your bank statements from the last three months, or statements from your property managing agent from the last three months
The bank and property managing statements need to be dated within six weeks of your application being submitted.
If the above isn’t available, you can also provide:
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Your most recent tax return, or
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The current lease agreement for your property where rental income is received
Investment income
Unloan will need a statement from the investment administrator (e.g. a registrar or broker) showing income received over the last 12 months. The statement will need to be dated within six weeks of the application being submitted.
Government payments
Unloan requires one of the below:
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Your bank statements from the last six months, or
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Letter or statement from the relevant government department showing the regular benefit amount. The bank statement, letter, or government statement needs to be dated within six weeks of the application being submitted.
Applications that are solely reliant on government payments (excluding pensions) are ineligible.
Child/spouse support and maintenance
Unloan will need one of the below:
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Your bank statement from the last six months, or
One of the following:
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Family Law Court Order, Child Support Agency Letter, Solicitor’s letter showing the regular benefit amount
Bank statements and letters needs to be dated within six weeks of your application being submitted.
Superannuation fund income
Unloan will need a statement or letter from your Superannuation Fund outlining the indexed pension amount or annuity or a bank statement from the last six months. The bank statement needs to be dated within six weeks of the application being submitted.
The superannuation statement or letter can be dated within the most recent 12 months of your application being submitted.
General advice
As part of your serviceability assessment and verifying your income, Unloan will consider the currency of any documents provided and, depending on your situation, Unloan may require additional documents.
Applications are subject to credit approval, satisfactory security, and minimum deposit requirements. Full terms and conditions will be set out in Unloan’s loan offer, if an offer is made.
Savings.com.au’s two cents
Unloan offers an attractive no-frills home loan product with a competitive low interest rate and, notably, no fees apart from unavoidable government and third-party charges. Its online application process is designed to be simple and speedy, promising fast loan turnaround times. It also offers access to online support tools and real people when you need them.
As a bonus, Unloan’s ongoing annual discount is a unique feature on the home loan market offering a built-in reward for customer loyalty without you having to negotiate for one. Other home lenders should take note.
One downside of an Unloan home loan is that it doesn’t come with the option of an offset account but that shouldn’t rule it out. Additional loan repayments are free and unlimited, as are redraws of any amount paid over the minimum scheduled repayments.
If you start out with an Unloan home loan and you feel you’d like to switch to another loan product with extra features should your circumstances change, the good news is that Unloan charges no exit or termination fees. It is a straightforward, relatively easy-to-understand product with few catches. Again, the home lending market could well take note.
First published on August 2022
Image by Namcha Ph via Unsplash
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