How to Get Bad Credit Home Loans in Australia (Guaranteed Approval)

If you’re looking for a way to get a good home loan, consider getting one with bad credit. There are several approaches to this, all of which require some research and the possibility of getting one is to look online.

In this article, you’ll learn how to acquire a home loan with adverse credit from many sources.

You can also contact banks and other lending institutions directly, and they will be able to assist you in determining the best options for you.

Bad Credit Home Loans in Australia
Photo credit: Quora

Requirements to Get Bad Credit Home Loans in Australia

Below are the requirements needed to get a home loan in Australia.

  1. Anyone with a credit score below 600 may have difficulty obtaining a home loan in Australia.
  2. Applicants must have had a regular monthly income for at least two years and no previous loan or credit card failures.
  3. To qualify for a bad credit home loan, you may be required to provide proof of earnings and assets.
  4. Some lenders provide unique programs that allow borrowers with poor credit to benefit from lower interest rates and fees.
  5. Suppose you cannot obtain a bad credit home loan. In that case, you may be able to obtain financing through a mortgage broker or lender specializing in non-traditional lending products for consumers with low or bad credit.
  6. Ensure that your credit is in good standing. If not, try to repair the damage as soon as possible. This can be accomplished by repaying debts with high-interest rates, opening new credit accounts, and making large monthly payments on past debts.
  7. Examine your income and assets. Ascertain that you have enough funds saved to cover the minimum loan amount as well as any other closing costs associated with obtaining a home loan. Additionally, you can think about starting your own business or buying real estate to increase your earnings.

How to Get Bad Credit Home Loans in Australia

Here is a step to get a bad credit home loan in Australia

#1. Get a Copy of Your Credit File

Before granting you a home loan, all prospective home loan lenders will carefully examine your credit history, so you should be able to discuss any negative marks on your credit file confidently.

Your annual credit report is yours for the taking, and you’re entitled to one free copy, which will keep you informed of any negative listings you may be able to fight using a credit repair service.

#2. Take Steps to Settle Any Outstanding Debts

New lenders will want to know what you’ve done to address previous credit issues, so make sure any defaults are paid and treat your previous creditors fairly.

#3. See if a Credit Repair Service can help you

Some negative credit listings could be removed from your file if they were placed without following all applicable laws.

In this regard, a credit repair specialist can assist you. Removing negative listings from your credit report can help you apply for a regular home loan instead of a bad credit home loan, which has higher fees and interest rates.

#4. Apply for a Loan with a Specialist Lender who Looks Beyond the Numbers

Specific Australian lenders specialize in bad credit home loans. These lenders, such as Pepper and Liberty Financial, look at your credit report and consider that bad credit can result from a lifestyle change, such as divorce or illness.

It will consider your income and other factors to grant you a loan, even if you’re a discharged bankrupt or have negative listings on your file.

#5. Don’t Apply for too Many Loans in One Space of Time

Your credit file contains all previous credit inquiries, including past loan applications. If you already have bad credit, be cautious when applying for a home loan. Too many inquiries in a short period can raise another red flag for prospective lenders.

#6. Tell Your Lender About Your Bad Credit Listings Honestly

A non-conforming lender, like any other lender, will look at all of the red flags in your credit history.

They will, however, request an explanation for each entry, and you must be thorough in your explanation.

You will not improve your credit rating if you try to conceal something and only raise the lender’s suspicions.

This may result in your application being denied because you were not being completely transparent or honest about your circumstances.

#7. Think About Lenders Mortgage Insurance (LMI) Before you Apply

Genworth and QBE have the lending criteria they use to evaluate your loan, which can be stricter than your lender’s in some cases, resulting in your application being rejected.

Some lenders do not use these insurers, which means there is no third-party risk of being denied a home loan due to LMI. Most of these lenders, like Pepper, have their own LMI alternative.

Top 10 Mortgage Brokers For Bad Credit Home Loans In Australia

Here is a list of the top 10 mortgage brokers for bad credit home loans in Australia.

#1. Pepper Money

Pepper Money prioritizes borrowers with a poor credit history or those who cannot prove their income.

Their prompt service and reasonable pricing enable borrowers to purchase a home or refinance their existing mortgage even if several other lenders have turned them down.


  • We outperform the other specialist lenders in terms of interest rates and fees.
  • Unique options for borrowers with poor credit.
  • Quick loan approvals


  • Interest rates that are higher than those of the central banks
  • They are less likely to assist with outlying or large properties.
  • Fixed rates are not available.
  • 5/5 from Home Loan Experts

#2. Resimac

Resimac is well-known for dealing with bad credit home loans and having unconventional lending policies.

The Resimac Specialist loan is designed for borrowers with bad credit, and there is no limit to the number of debts consolidated with this loan product.


  • There is no credit scoring.
  • The interest rate is determined by security rather than the purpose of the loan.
  • Solutions for borrowers with poor credit


  • The lending policy is relatively strict.
  • Not always are interest rates and fees competitive.
  • During busy periods, evaluate your application slowly.
  • 5/5 from Home Loan Experts

#3. Bluestone Mortgages

Bluestone’s Specialist loan is designed for borrowers who have experienced credit issues such as bankruptcy or other defaults.

They categorize a borrower’s credit history as Clear, AAA, AA, A, or BBB based on the number of defaults, recently missed mortgage payments, and if they have a history of bankruptcy or part 9 agreements.

A borrower classified as Clear (the highest category) will receive a lower interest rate than one classified as BBB (the lowest category). Being in a lower category also necessitates a more significant deposit.


  • Using common sense instead of credit scoring to evaluate loans
  • Unique options for borrowers with poor credit.
  • Most unusual income types are accepted at 100%, but bonus income is shaded.


  • Rates and fees are significantly higher than those of a central bank.
  • Non-metropolitan LVR restrictions
  • Land and construction loans are not available.
  • 4/5 from Home Loan Experts

#4. La Trobe Financial

La Trobe’s bad credit commercial loans and low-doc commercial loans, which specialize in home loans for borrowers with a bad credit history, often have high rates but provide borrowers with options that aren’t available from other lenders.


  • Solutions are designed specifically for borrowers with a poor credit history.
  • A reasonable cashout policy
  • Using common sense instead of credit scoring to evaluate loans


  • The maximum LVR is 80% of the property value.
  • Risk fees, like Lenders Mortgage Insurance, can be costly.
  • Compared to other specialist lenders, interest rates and fees are not always competitive.
  • 4/5 from Home Loan Experts

#5. Liberty Financial

Liberty’s specialist lending is ideal for borrowers who want to repair their credit history. If, on the other hand, a borrower fails to make payments on their home loan, Liberty will repossess the related property faster than any bank.


  • Mortgages without genuine savings
  • When determining your borrowing capacity, be prudent.
  • Unique options for borrowers with poor credit.


  • Among the most expensive LMI products available.
  • Uncertainty regarding loan approval
  • Frequently do not adhere to the rates promised during the application process.
  • 4/5 from Home Loan Experts

#6. Nano 

The Mozo Judges were so impressed with Nano’s Variable Home Loan that they awarded it the prestigious title of Best New Home Loan for 2022 and a second win in the Low-Cost Mortgages No upfront costs are required, and the variable interest rate is 2.74 percent per year (2.74 percent per year comparative rate*).

It also has several features, such as an offset sub-account with a Visa debit card, Google Pay, and Apple Pay, as well as a handy app to help you manage your money.


  • 74 percent per annum variable rate (2.74 percent per annum comparison rate*)
  • There are no up-front or ongoing costs.
  • Sub-account offset

#7. OneTwo 

The OneTwo Variable Rate Home Loan kicks off with a low variable interest rate of 2.59 percent per annum (2.49 percent per annum comparison rate) for owner-occupiers, as well as the ability to make free extra repayments.

OneTwo will also generously match any additional loan repayments you make in the first six months (up to $2,500).

Another great feature of this loan is the interest discount – OneTwo will reduce your interest rate by 0.03 percent for every 5% reduction in your original loan amount (discount capped at 0.15 percent ).

Lastly, this loan received a 2022 Mozo Experts Choice Home Loan Award in the Low-Cost Home Loan category.


  • Variable rate of 2.59 percent per year (2.49 percent per year*)
  • As you pay off your loan, you will receive discounts.
  • For the first six months, extra repayments are matched up to $2,500.

#8. Yard

The Yard Variable Home Loan kicks things off with competitive variable interest rates starting at 2.94 percent p.a. (2.96 percent p.a. comparison rate*) for investors with a minimum deposit of 20%. (deposits as low as 10 percent may be accepted, but interest rates could vary).

The loan includes several flexible features, including unlimited extra repayments, a free redraw facility, and an optional offset account (for a monthly fee of $10).

To top it all off, it received a Mozo Experts Choice Home Loan Award in the Investor Home Loan category in 2022.


  • Competitive variable rates for investors start at 2.94 percent per annum (2.96 percent per annum comparison rate*).
  • Redraw and free extra repayments
  • Offset account ($10/month) optional
  • Winner of the 2022 Mozo Experts Choice Home Loan Award

#9. Well Home Loans 

The Well Home Loans Well Balanced Fixed home loan received not one but two 2022 Mozo Experts Choice Home Loan Awards in the Split Home Loan and Investor Fixed Home Loan categories and offers a competitive 4.42 percent p.a. 2-year fixed rate (2.95 percent p.a. comparison rate*) for owner-occupiers (investors can access a 2-year rate at 4.48 percent p.a. (3.23 percent p.a. comparison rate*).

Furthermore, the loan includes a slew of cool features, including the ability to make free extra repayments, a redraw facility, an optional offset account (for $10 per month), and flexible repayment options.


  • 2-year fixed interest rate of 4.42 percent per annum (2.95 percent per annum comparison rate*) for owner occupiers
  • Adaptable repayment schedule
  • Borrow up to $200,000

#10. Harmoney

The Australian Financial Review named it one of the most innovative companies in Australia (AFR). Harmoney’s Libra® real-time credit scoring technology helped the company place fourth in the banking, super, and financial firms category of the prestigious 2021 AFR BOSS Most Innovative Companies Awards.

This low-cost loan is quick, simple, and entirely online. There are no ongoing fees or extra repayment penalties, and it’s ideal for savvy borrowers with excellent credit. You may be eligible if you are over 18 and earn more than $30,000 per year (other eligibility criteria may apply).


  • All of the loans are unsecured.
  • Rates start at 5.35 percent 1 (compared to 6.14 percent 2).
  • For the term of the loan, your interest rate will not change
  • For loans under $5,000, there is a $275 establishment fee.
  • For loans of $5,000 or more, the establishment fee is $575.
  • There are no monthly account maintenance or early repayment fees.
  • You can pay weekly, biweekly, or monthly.


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Can a 500 Credit Score Buy a House?

You can qualify for a mortgage with a government-backed loan, such as an FHA loan, even if your credit score is 500.

It may be tempting to buy a home as soon as possible, but it is better to take your time evaluating available options and interest rates before beginning your loan search.

Can you buy a House with Bad Credit in Australia?

Significant banks or lenders may refuse to lend to Australians with bad credit for various reasons.

It could be due to the type of bad credit you have or the size of your defaults, but having blemishes on your credit file can generally prevent you from borrowing.

How Can I Get a Home Loan with Bad Credit and No Deposit?

A guarantor (usually your parents) will put up their property as security for a guarantor home loan, allowing you to borrow with no deposit.

You can borrow up to 105% of the purchase price and do not require any savings. Your parents (or another guarantor) must provide a guarantee, which the property must secure.

What’s the Lowest Credit Score Possible?

Your credit score cannot be lower than 300. Credit scores typically fall within the range of 300 to 850; a credit score outside that range is impossible. In 2021, the national average credit score for FICO was 716 and 694 for VantageScore.

Can I Buy a House with a 534 Credit Score?

In general, applicants with credit scores of 580 or higher are more likely to receive maximum financing on typical new home purchases.

According to FHA guidelines, a loan’s maximum loan-to-value (LTV) is set at 90% for borrowers with credit scores ranging from 500 to 579.

How do I Fix my Credit to Buy a Home?

  • Examine your credit report. Understanding the information in your credit report is essential to improving your credit score.
  • Resolve any mistakes on your credit report.
  • Pay off any outstanding debts.
  • Avoid using credit to make purchases.
  • Don’t open or close any credit lines.

How Can I Quickly Raise my Credit Score?

  • Reduce your credit card balances. You should have enough money to pay more than the minimum monthly payment.
  • Boost your credit limit.
  • Examine your credit report for any errors.
  • Request that paid-off negative entries be removed from your credit report.

Do Mortgage Brokers do a Credit Check?

In the case of mortgages, for example, a Broker may run a credit check, ensure income and equity criteria are met with documentation (such as identity verification and wage slips), obtain an Agreement in Principle, and ensure the customer is advised correctly. The industry is highly regulated.

Can I Get a Home Loan with a $5000 Deposit?

Unfortunately, a $5,000 deposit is insufficient for a $450,000 property, and a down payment of at least $22,500 is required.

You can use the following simple strategies to save for a larger deposit on your home loan: Set short, medium, and long-term savings goals and track your progress.

Finally, you must have a good credit history to get a home loan in Australia. There are, however, several ways to boost your credit score and get guaranteed home loan approval.

Use credit counseling services, pay your bills on time, and keep a good credit rating. If you can do these things, you will have a much better chance of getting a home loan approved.

It is not as difficult as you might think to obtain a bad credit home loan in Australia. You can get approved for a loan that meets your specific needs with the help of a reputable mortgage broker.

Watch the video below to know how to get bad credit home loans in Australia:

About Author

Bad Credit Home Loans in Australia
Lydia Alolade
I am a professional article and e-book writer with 4 years of experience, I write on well research content on cryptocurrency, stocks, loans and finances.

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