Yes — but not from the big four. Here’s how specialist lenders actually assess you, what you’ll pay on top of a prime rate, and the realistic path back to a mainstream loan.
Yes, you can get a home loan with bad credit in Australia. Specialist (non-bank) lenders assess beyond your credit score — they look at current income, savings patterns and recent improvements. Expect to pay 0.5%–1.5% above prime rates, provide a 15%+ deposit, and allow 2–4 weeks for assessment. Most borrowers refinance to a prime lender within 2–3 years once their credit file recovers.
Australian credit scores come from three bureaus (Equifax, illion, Experian) on different scales. As a rough guide:
| Equifax score | Rating | Lender appetite |
|---|---|---|
| 833–1200 | Excellent | All lenders; sharpest rates |
| 726–832 | Very good | All lenders |
| 622–725 | Good | Most lenders |
| 510–621 | Fair | Second-tier + specialist |
| 0–509 | Below average | Specialist lenders only |
A default (missed payment reported to the bureau), a judgement, or a bankruptcy are the three specific events that turn most major banks into an automatic “no”. The good news: once an event is 12+ months old and you have a clean track record since, specialist lenders will seriously consider you.
Three tiers of lender exist:
A specialist mortgage broker will know which lender is active for your specific situation this month — lender policies change frequently and most consumers don’t see them advertised.
Compared to a prime rate, expect:
On a $600,000 loan, a 1% rate premium equals roughly $6,000 per year in extra interest. Over a 3-year bridge until you can refinance, that’s $18,000 — a real cost, but often worth it vs continuing to rent.
For comparison, a prime borrower typically moves from application to settlement in 2–3 weeks. The extra 1–2 weeks for bad credit is the manual underwriting process. See our glossary for how lenders assess.
A bad-credit loan is almost always a bridge, not a destination. The realistic path back to prime:
Yes. Specialist (non-bank) lenders and some second-tier banks will consider you even with defaults, missed payments or a low credit score. Approval chances rise sharply with a 15%+ deposit and 6+ months of clean payment history since the most recent default.
In Australia, credit scores under 500 (Equifax) or 622 (Experian) are usually treated as high-risk. Most major banks want 700+. Specialist lenders will consider 450–700, often at a rate 0.5–1.5% higher than a prime borrower would get.
Yes. Every formal application lodges a credit enquiry that stays on your file for 5 years. Multiple enquiries in a short period make lenders assume financial distress. That is why specialist brokers run a single “soft” preliminary check, then apply only with the best-fit lender.
Yes, and you should. Most bad credit borrowers refinance within 2–3 years once 6–12 months of clean repayments rebuild their credit file. Refinancing to a prime lender typically saves 0.5–1.5% on the rate.
Most specialist lenders want 15–20% deposit minimum. A 20%+ deposit both avoids LMI and significantly improves approval odds. Some specialist lenders price a 20% deposit borrower within 0.3% of prime rates.
No. Every regulated home loan in Australia requires a credit check — this is mandatory under the National Consumer Credit Protection Act. Anything advertised as “no credit check” is not a regulated home loan product and should be treated with extreme caution.
We’ll match you with a specialist broker who works daily with bad-credit lenders. No cost to you — our service is free to you.
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