Second tier lenders in Australia include Bankwest, St.George, Heritage through People First Bank, ME Bank, La Trobe Financial, Liberty, Bluestone, Firstmac, Resimac and Pepper Money. They cover different ownership models and credit policies. Choose the lender whose policy fits the borrower’s income, security and loan purpose.
A smaller brand does not guarantee an easier approval. Confirm your accreditation and run the file through the lender’s calculator before quoting.
Overview of Second Tier Lenders
In broker usage, second tier lenders are alternatives to the four major-bank parent brands. This list includes brands within major-bank groups, a customer-owned bank and non-bank lenders. Second-tier and third-tier are informal, overlapping market labels with no regulatory status.
A provider can have both mainstream and specialist products. This list compares ordinary prime or full-documentation options for a borrower just outside major-bank policy. Adverse-credit and alternative-documentation product selection belongs with the specialist shortlist.
Check whether the credit provider is an authorised deposit-taking institution (ADI) or a non-bank before discussing policy or promising a turnaround. Ownership alone does not tell you which documents a lender accepts. The guide to tier 1, tier 2 and tier 3 lenders explains the categories.
10 Australian Lenders to Compare Beyond the Major Banks
1. Bankwest
Bankwest is a division of Commonwealth Bank. Treat its products as a separate comparison on your panel while recognising the group ownership. Test the borrower’s income and security against Bankwest’s policy instead of assuming a CBA decline produces a different result.
Use the Bankwest lender guide for the policy questions that decide the file’s fit.
2. St.George
St.George is a Westpac Group brand. A borrower who prefers the St.George name still needs to meet its credit policy. Compare the specific product and assessment result before presenting it as a path after a Westpac decline.
The St.George lender guide helps you separate brand preference from the policy assessment.
3. Heritage Through People First Bank
Heritage and People’s Choice merged in 2023 to form the customer-owned bank now branded People First Bank. Confirm which brand and lodgement channel your accreditation covers. Use the People First Bank lender guide when assessing a Heritage enquiry.
If the client wants a customer-owned bank, confirm the available product before quoting under either name.
4. ME Bank
ME Bank is part of the Bank of Queensland group. Compare the ME product available through your panel using its comparison rate and fees. For an internal group refinance, read any offer’s eligibility terms before including a cashback in the comparison.
Start with the ME Bank lender guide for income and credit-policy checks.
5. La Trobe Financial
La Trobe Financial’s Residential Full Doc loan is a non-bank option for borrowers who can verify their income with payslips or tax returns. Its target market includes purchases and refinancing, with equity release for personal or business purposes. Compare a suitable prime loan first, then assess the full-doc option when the loan purpose falls outside a bank’s policy.
The La Trobe Financial lender guide helps you identify the relevant policy questions. Match the security and loan purpose to the Residential Full Doc criteria. The product documents identify the credit provider and applicable terms.
6. Liberty
For an ordinary purchase with full income evidence, compare Liberty Sharp. Its target market covers a simple variable-rate loan without special features, for borrowing up to $500,000. It includes corporate trustees for family trusts, giving you a specific borrower-structure question to test when a major bank’s policy does not fit.
Liberty’s lender products and Liberty Network Services’ aggregator arrangements are different questions. Your lender accreditation determines whether you can lodge the product. Use the Liberty lender guide to assess the file against Sharp’s current eligibility and income-document requirements.
7. Bluestone
Bluestone is a non-bank home-loan lender with a Prime full-doc option. For a borrower with documented overtime or commission income, compare the amount its policy accepts in servicing with the bank’s result. This gives a reason to assess Prime without selecting a specialist credit product.
The Bluestone lender guide helps you frame that assessment. Apply Prime’s income-document and credit-conduct requirements. A product described as flexible still needs an application and approval.
8. Firstmac
Firstmac is a non-bank lender with the related consumer brand loans.com.au. Its Simple Home Loan covers purchases and refinancing with variable rates and principal-and-interest repayments. For a fully documented borrower still on probation, test Firstmac’s employment-continuity requirements against the file. Its policy can consider probation when those requirements are met.
Use the Firstmac lender guide for the broker product and policy checks. Compare the product you can lodge through your accreditation. A rate on the consumer website does not establish the rate available through your broker channel.
9. Resimac
Resimac is a non-bank lender, with homeloans.com.au as a consumer brand. Its Prime and Prime Flex full-doc products cover PAYG and self-employed applicants. Company and discretionary-trust applicants are also considered, making borrower structure a reason to test these products when a major bank’s policy does not fit.
The Resimac lender guide is the starting point for the file’s income and credit checks. Compare Prime’s fee structure with Prime Flex and assess the product available through your broker appointment. Keep lender accreditation separate from any aggregator relationship.
10. Pepper Money
Pepper Money’s Prime Full Doc home loan is an option for borrowers with standard income evidence. Its treatment of overtime and bonus income gives you a specific servicing question to compare with a major bank. Use the Pepper Money lender guide to match the file to Prime’s income and security requirements.
HSBC’s sale announcement says Pepper Money will service its Australian loan portfolio after the sale to a Blackstone-owned buyer completes. The sale remains subject to conditions. That pending servicing role does not establish eligibility for a new Pepper loan.
Comparative Analysis of Services
Compare the live comparison rate and fee sheet for the product you can actually lodge. Read the document list alongside the lender’s serviceability result. A lower advertised rate cannot resolve an income-policy mismatch.
ADIs apply the mortgage serviceability buffer under the Australian Prudential Regulation Authority (APRA). APRA’s APS 220 Credit Risk Management requires a buffer of at least 3 percentage points unless APRA determines otherwise. Non-banks set their own serviceability tests.
The Reserve Bank’s cash-rate target is 4.60%. It does not set a lender’s standard variable rate. Compare the lender’s actual rate and assessment rate for the borrower’s product.
Trends and Innovations in Second Tier Lending
Digital lodgement changes how you submit a file, while responsible-lending duties still apply. An alt-doc application needs the income documents the lender specifies, such as business activity statements or an accountant’s letter.
Confirm the lender’s submission channel and document requirements before promising fast loan processing. A chatbot can help navigate information. It must not choose the product for the borrower.
Regulation and Compliance
ADIs remain bound by responsible-lending obligations under the National Consumer Credit Protection Act 2009 (NCCP Act), alongside APRA’s prudential standards. The bill that proposed removing those obligations lapsed. Non-bank consumer lenders and brokers also have duties to assess whether consumer credit is unsuitable.
The Australian Securities and Investments Commission (ASIC) explains those duties in RG 209 Credit Licensing: Responsible Lending Conduct. Check which entity holds the Australian credit licence (ACL) for the product. There is no separate state non-bank licence for a consumer home loan.
Lenders mortgage insurance (LMI) insures the lender. Check the product’s LMI requirements and loan-to-value ratio (LVR) limits before quoting a low-deposit option. The borrower can remain liable for a shortfall after the insurer pays the lender.
Consumer Tips for Choosing a Lender
Check accreditation, run the lender’s serviceability calculator and write a comparison note explaining the proposed loan. Include the fees and the policy reason for choosing it. A review site’s star rating does not replace the lender’s Credit Guide.
Advice about financial products can require an Australian financial services licence (AFSL). Refer the client to an appropriately licensed adviser when the question crosses that boundary. For a customer-owned bank enquiry, confirm whether your appointment names Heritage or People First Bank.
Rebrands and Panel Changes to Watch
Rebrands and group ownership can change the name on your panel without removing the need for a product comparison. Heritage is part of People First Bank, while ME sits within BOQ. Confirm the accreditation and lodgement details when a brand changes.
The Mortgage and Finance Association of Australia (MFAA) reports a record 81.6% broker share of new residential home loans in its latest quarterly market-share statement. That figure describes the broker channel. It does not rate any lender on this list.
Common Borrower Scenarios
These illustrative scenarios show how to test a file. They describe possible assessments, not actual borrower outcomes.
First-Home Buyer
A first-home buyer with thin credit history can still fit an ADI if verified income and living costs meet the assessment. Test that path before moving to a specialist product. For a low-deposit guarantee, confirm the scheme’s eligibility and the lender’s participation.
Small Business Owner
A self-employed borrower seeking funds for expansion needs an assessment of the loan purpose and security. Heritage or People First Bank is not an automatic fit. Get the commercial lending requirements in writing and establish whether the NCCP Act applies to that loan.
Debt Consolidation
Folding short-term debts into a Pepper home loan still requires a suitability assessment. A 30-year mortgage can increase total interest even when monthly repayments fall. Show the repayment term and total cost before the client agrees.
If this list does not cover the file’s issue, compare specialist third-tier lenders against that issue before applying.
How to Apply for a Loan With a Second Tier Lender
Lodge through the aggregator or lender portal covered by your accreditation. Follow these six steps.
- Research and compare the lenders available through your panel. Compare the product’s rate and fees for the borrower’s scenario.
- Check eligibility using the lender’s serviceability calculator and income policy. Review the credit report and score. Equifax and Experian both publish score ranges from 0 to 1200. Their scores use different calculations.
- Gather identification and income evidence, living costs, liabilities and the written comparison note. An alt-doc file needs every document required by the product.
- Submit the application through your approved aggregator system or lender channel. Include the explanation and evidence for any policy exception requested.
- Read the approval conditions and issued loan terms. Conditional approval is not formal approval. Do not waive a finance clause while conditions remain open.
- Arrange acceptance and settlement after the conditions are satisfied. Settlement transfers the funds and completes the relevant title and mortgage changes.
Check Accreditation Before Quoting
Confirm your current accreditation and the lender’s policy before quoting. For Heritage enquiries, check whether Heritage or People First Bank appears on your panel and use the corresponding lodgement channel.
