Pepper Money is a leading Australian non-bank lender specialising in flexible home loan options. Founded in 2000, Pepper Money has helped nearly 500,000 Australians achieve their financial goals. Pepper home loans offer a range of products tailored to different borrowers, from first-home buyers to self-employed people to those with past credit blips. This guide covers everything you need to know about Pepper Home Loans: the highlights, the drawbacks, the loan products and interest rates, application requirements, and more. You’ll also learn how working with a mortgage broker in Brisbane can help you get the best deal.
Let’s dive in
The Top 5 Things Pepper Home Loans Are Good At
Flexible lending criteria
Pepper Money prides itself on considering borrowers that big banks might decline. Small credit blips, minor defaults or unpaid utility bills won’t automatically knock you out of the running. Pepper accepts paid or unpaid defaults up to $500 for Prime loans, up to $1,000 for Near-Prime loans, and even accepts recent bankruptcies and arrears on their Specialist loans. They also happily consider self-employed applicants: you can apply with just 6 months of ABN/GST history for alt-doc loans. In short, Pepper is good at saying “yes” where many lenders say “no” – they specialise in so‑called “non-conforming” borrowers.
Low-deposit and gifted-deposit options
Pepper can lend up to 95% of the property value, meaning you only need a 5% deposit in many cases. Even better, Pepper does not charge lenders’ mortgage insurance (LMI) on loans up to 95% LVR – instead, they use a one-off Lender Protection Fee (LPF). In practical terms, that means first-home buyers can often buy with only a 10% deposit (and sometimes 5%) without the huge LMI bill. Pepper also welcomes gifted deposits. If your parents are chipping in or you’ve inherited a nest egg, Pepper will accept gift letters and bank statements to prove the funds. First-home buyers can even use Government schemes (e.g., the First Home Guarantee) with Pepper, which supports these assistance programs.
Speedy approvals and service
Pepper Money aims for a fast turnaround. Their site promises conditional approval within 48 hours once you submit a complete application, and in many cases, they see home loans through in “2-3 business days”. Pepper’s large broker network (over 15,000 mortgage brokers) and online tools (borrowing calculators, rate estimators) also help speed things along. The overall result is that, for eligible applicants, Pepper can beat many banks on approval time.
Wide range of loan features.
Pepper offers both fixed and variable rate loans, and many useful features familiar to Aussie borrowers. For example, their loans come with a 100% offset account (to save interest) and a free redraw facility. You can make extra repayments at any time with no penalty. Pepper also lets you “consolidate unlimited debts” – so you can roll credit cards, personal loans, even multiple home loans, into your Pepper loan to simplify repayments. For owner-occupier borrowers, there are low (or no) restrictions. They also allow things like an ABN from 6 months or 1 year for full-doc, which many banks won’t. In short, Pepper Money offers a robust feature set with home loan tools (offset, redraw), term choices (up to 40 years), and loan options to match borrower needs.
Strong customer satisfaction
Pepper Money consistently scores highly in customer surveys. First-home buyers in particular note Pepper “made everything so easy” even after the banks said no. Internal Pepper site testimonials echo this – for example, one borrower raved, “Pepper Money delivered outstanding service from pre-approval to discharge”. This suggests Pepper’s focus on small borrowers and tailored advice pays off in happy customers.
Top 5 Things Pepper Money Mortgages Aren't So Good At
Higher interest rates (for low-risk borrowers)
Because Pepper targets non-standard borrowers, its advertised rates tend to be higher than those of major banks for prime customers. In other words, a customer with great credit might save a bit by using a big bank instead. This gap widens at higher LVRs. In practice, this means that while Pepper can say “yes” to many who are turned down by banks, its rate sheet is not always as low as those of standard products from the majors.
Ongoing and upfront fees
Pepper Money is a non-bank and has a different fee structure from many big banks. Every Pepper home loan has a Monthly Administration Fee, payable each month (in arrears). This fee typically ranges from $10–$25 per month on Pepper loans. Big banks often have fee-free package home loans, so this is a cost that Pepper borrowers must budget for. Additionally, because Pepper doesn’t charge LMI, it imposes a one-off Lender Protection Fee (LPF) on high-LVR loans. The LPF (similar to an LMI premium) can be several percentage points of the loan. While it speeds up the approval process, since no insurer is involved, it is non-refundable and adds cost. Finally, Pepper charges an establishment fee, title insurance fee and legal fees at settlement – items bigger banks sometimes bundle or waive for special loans. In summary, Pepper’s fees may be higher than those of some banks, as they rely on a monthly servicing fee and insurance fees, rather than waiving rates or offering premium offset accounts to all borrowers.
Non-ADI and limited branch presence.
Technically, Pepper Money is an APRA-regulated Authorised Deposit-taking Institution (ADI), but it’s not a traditional consumer bank you walk into. Instead, most Pepper loans are arranged online or via mortgage brokers. There are no Pepper-branded branches where you can go for in-person service. This means Pepper relies on phone/email support and its network of brokers. For borrowers who like face-to-face banking with their local branch manager, Pepper’s model may feel impersonal. Similarly, Pepper does not offer everyday banking products like debit accounts or credit cards – just the loan. So, if you prefer one-stop banking, Pepper would require separate accounts elsewhere.
Higher-rate offers limited to short fixed terms
While Pepper offers fixed rates, they tend to be with higher pricing. This is partly because Pepper structures fixed loans to suit riskier profiles. Big banks occasionally have special fixed deals, whereas Pepper’s fixed rates are less competitive. In short, Pepper’s fixed products provide stability (with no break costs and unlimited extra repayments) but not savings. Borrowers seeking a very low fixed rate may prefer other lenders.
Limited incentives and extras
Pepper Money does not offer some of the customer perks that other lenders do. For instance, Pepper generally has no introductory cash-back or waiver of legal costs promotions, aside from occasional limited-time offers, which brokers will know about. The only offset account Pepper provides is a 100% offset sub-account, not a full checking account, and it’s tied to eligible loans. In contrast, some Australian lenders provide everyday banking perks such as free credit cards or offsets for active savers. Finally, Pepper’s maximum loan sizes can be lower than those of big banks. For example, their Prime loan caps at around $2 million, whereas major banks can lend higher amounts to high-net-worth customers. For most first-home buyers, these caps aren’t an issue, but they could be for buyers of very expensive homes.
What Are The Different Home Loan Products They Offer?
Pepper Money’s home loan products are designed in tiers to match different borrower situations. In simple terms, they segment loans by credit profile and income proof, plus by loan purpose. The main categories of Pepper home loans are:
Prime Home Loan Option
This is for borrowers with strong credit and stability. The Prime loan offers the lowest rates in Pepper’s range. It suits full-doc, salaried applicants with solid incomes and deposits.
Features of the Prime option include:
- Consolidating unlimited debts
- Up to $2 million maximum,
- Lending on vacant land.
- No genuine savings required up to 90% LVR
- No LMI required
If you qualify for Prime, you get Pepper’s most competitive pricing, offset account, and redraw facilities.
Near-Prime Clear Home Loan Option
This product is for applicants who are mostly prime but may have minor credit imperfections. Near prime suits borrowers who were rejected by banks due to small credit hiccups, but otherwise have steady finances.
Features of the Near Prime Clear option include:
- It allows “paid or unpaid defaults up to $1,000”
- No limit on the number of debts you can consolidate
- It also offers longer mortgage terms of up to 40 years and a higher maximum loan
- Near-Prime Clear still requires full income proof of one year financial statements or tax returns) for self-employed
Near-Prime Loan Option
Geared to borrowers with more complexity, Near-Prime effectively “looks beyond your credit score”, so it’s for cases where Prime or Near-Prime Clear won’t go. The conditions are not quite as extreme as Specialist. You still need some documentation and evidence of stability.
Features of the Near Prime Clear option include:
- Accepts applicants with risk factors such as recent bankruptcy (discharged), mortgage arrears within 6 months, or defaults less than 12 months old.
- Allows consolidation of unlimited debts
- Defaults up to $3000
- Self-employed applicants can apply with 2 years of tax returns
Specialist Home Loan Option
The Specialist range is for “tricky circumstances or life events”. This is the highest-risk category and therefore has the highest rates. It’s intended for borrowers who wouldn’t pass other lenders’ criteria due to recent bankruptcies (even discharged only 1 day prior), major defaults, or very unconventional income.
The Specialist product will consider clients who have “mortgage arrears within the last 6 months”. It “accepts defaults registered less than 12 months ago”. Even part-time and very new self-employed incomes are accepted with ABNs from 6 months.
Of course, interest rates and terms are tighter, and comparison rates can approach the double digits. Specialist loans still have Pepper’s basic features but are priced for risk. It’s the lender-of-last-resort category: better than no loan, but take care with the higher cost.
In addition to these credit-based tiers, Pepper offers specialised home loan purpose categories:
First Home Buyer Loans
While technically a subset of the above tiers, Pepper markets specific tools for first-home buyers. These include advice on using Government grants, acceptability of HECS-HELP debt, and low-deposit flexibility. (Pepper even ran campaigns where first-home buyers could get finance with only 5% deposit.) The core products are the same, but the benefits – gifted deposits accepted, no need to clear HECS debts up front, quick pre-approvals – are emphasised.
Investment Property Loans.
Pepper’s investment loans allow up to 5 years of interest-only repayments and include unlimited debt consolidation for investment purposes. Borrowers can cash out up to 80% LVR on established properties to access equity. These loans share the same Prime/Near-Prime/Specialist tiers, but with IO options and different criteria (e.g. stricter on rental proof). The key point is that Pepper is willing to fund small investors, including those refinancing multiple properties.
Construction/Home Renovation Loans
For building or major refurbishments, Pepper provides construction loans. They allow interest-only payments for the first 18 months while the home is built. You can apply as full-doc or alt-doc, with terms from 10 to 30 years. They even consider small defaults (up to $500) during the build phase. Once construction finishes, the loan automatically converts to a standard mortgage for the settled loan amount. Construction loans pay out in stages to the builder, similar to banks. This product is popular with first-home buyers planning their own build or buyers of off-the-plan homes.
Self-Employed and Low-Doc Loans.
If you’re self-employed and lack formal 2-year tax returns, Pepper’s Low-Doc (also called Alt-Doc) loans may help. With as little as 6 months ABN/GST history, Pepper can consider alternative proof of income. For example, six months of business bank statements or BAS can stand in for payslips. The Prime and Near-Prime products have Alt-Doc versions (with slightly higher rates). This caters to gig workers, contractors or freelancers who struggle to provide conventional paperwork. Note: Alt-Doc loans usually have higher rates/fees due to less documentation.
Refinance and Cash-Out Loans
Any of the above products can be used for refinancing an existing loan or extracting equity in established properties. Pepper is quite flexible here: you can combine multiple debts into one loan, and borrow against equity, subject to LVR limits. The process is similar to a purchase loan, but it is flagged as a refinance. Importantly, for LVR above 80%, Pepper will charge the LPF rather than LMI.
In essence, Pepper Money packages its home loans into layers (Prime, Near Prime, Specialist) and adjusts documentation requirements within each layer. All options offer both variable-rate and fixed-rate choices. The fixed-rate loans come with terms of 2, 3, 5, 7 or 10 years, no break costs, and unlimited extra repayments. If you want a fixed rate, expect to pay a bit more than the variable version, but you gain certainty.
What Are Pepper Home Loans Rates?
Variable Interest Rates
Pepper Money’s current variable rate range (Principal & Interest) for owner-occupiers and investors is:
Rate Type | Interest Rate | Comparison Rate |
Variable home loans | 6.14 % p.a. – 11.84 % p.a. | 6.32 % p.a. – 11.99 % p.a. |
These rates fluctuate based on factors like Loan-to-Value Ratio (LVR), credit profile, documentation type, and lender funding costs.
Fixed Interest Rates
Pepper also offers fixed-rate options—typically 1, 2, 3, 5, 7, up to 10 years. For a 2‑year fixed term:
- Rates range from 6.14 % p.a. to 11.84 % p.a.
- Comparison rates range from 6.32 % p.a. to 11.91 % p.a.
- No break fees if you end the fixed rate early
They do offer a “rate lock” feature where, by paying a non-refundable fee (≈ $750 or 0.15 % of loan over $500k), you can lock in a rate for 90 days pending settlement.
*Note: These rates are valid as of July 2025 and are subject to change without any notification
Interest-Only Loans
If you go interest-only (IO), expect rates a bit higher than Principal & Interest. They don’t publish exact IO rate bands, but the Pepper home loan website notes that IO loans cost more, so you’ll need to check your individual offer.
Overall, Pepper’s headline rates are higher than the very lowest advertised by big banks, reflecting its risk appetite. But for many first-home buyers, securing a loan at a slightly higher rate may be worthwhile if it means getting in the door when other lenders said no. Even so, it pays to compare Pepper’s rates with big banks and credit unions – sometimes a saving of 0.5%–1% p.a. can add up to tens of thousands over 30 years.
What Documents Does Pepper Money Need For A Home Loan?
Like any Aussie lender, Pepper Money requires the usual verifications for ID, income and assets. The precise documents depend on your employment type, but in general, you will need:
- Proof of Identity: Passport (Aussie or foreign with PR visa) or driver’s licence. Pepper will need certified copies of identification.
- Proof of Deposit/Genuine Savings: If you have saved the deposit yourself, provide at least 3 months of bank statements showing accumulated savings. Pepper also allows proof of deposit via share certificates or dividends if stocks were sold, or proceeds of the sale of another property. If part of your deposit is gifted by family, you must supply signed gift letters and evidence of transfer.
- Proof of Income (PAYG employees): For salaried workers, Pepper asks for at least two recent payslips plus one of the following: latest group certificate (PAYG summary) or Notice of Assessment from the ATO, or an employment letter confirming your salary. Alternatively, you can provide recent bank statements showing salary credits.
- Proof of Income (Self-Employed): Requirements depend on how long you’ve been self-employed. If 6 months or more, you need your ABN/GST registration and one of these:
- 6 months of business bank statements,
- 6 months of BAS statements,
- A signed accountant’s letter confirming income.
If you’ve been self-employed for over 2 years, Pepper wants 2 years of tax returns and Notices of Assessment, or 2 years of accountant-prepared financial statements.
- Expenses and Debts: You’ll need statements for any liabilities you carry. For example, current loan statements (home, car, personal), credit card statements, any court judgments or child support. Pepper will calculate your living expenses and debt obligations. For home loans, also provide current rent or mortgage statements.
- Property Documents: If refinancing, provide your existing loan contract and valuation. Pepper will order a fresh valuation on purchase loans. For an off-the-plan or construction purchase, you’ll need the contract of sale and the builder’s construction contract.
In summary, Pepper Money’s document checklist is similar to those of other lenders. They require certified ID, evidence of savings, and proof of income appropriate to your employment. The main difference for Pepper home loans is that they will often allow a single payslip or bank statement as evidence for alt-doc loans, whereas banks typically want multiple payslips or full tax returns.
A mortgage broker can help gather these documents. If you are ready to apply for a Pepper Home loan, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
How Much Can I Borrow From Pepper Home Loans
Your borrowing power with Pepper Money depends on the same fundamentals as with any lender: your income, living expenses, existing debts, the property value, and the LVR (loan-to-value ratio) you need. Here are a few scenarios:
Scenario 1. Single Income (No Debts):
- Gross Income: $85,000 per year (approx. $5,416/month after tax)
- Monthly Living Expenses: $2,000 (rent, groceries, utilities, transport)
- No credit card
- Other Debts: None
In this scenario, if you have a 20% deposit, you can borrow about $436,000 to buy a home worth $545,000. However, if you bump up your deposit to 45%, your borrowing capacity jumps up to about $429,775 to buy a house worth $781,409.
Scenario 2. Couple with 1 Child:
- Combined Gross Income: $180,000 per year ($10,000/month after tax)
- Monthly Living Expenses: $4,200 (childcare, groceries, rent, insurance, transport)
- Credit Card Limits: $5,000 total (between both applicants)
- No other debts
In this scenario, if you have a 20% deposit, you would be able to borrow about $892,000 to buy a home worth $1,100,000.
How Long Do Pepper Home Loans Take To Approve?
Pepper Money prides itself on speed, especially for eligible applications. They advertise conditional approval in about 48 hours and aim to contact applicants within 1 business day. In practice, here’s the typical timeline:
- Application Submission: Once you’ve gathered your documents, you lodge via Pepper’s online portal or through a broker. The best way to lodge your application is to use a broker as they can help you avoid common mistakes which can delay your loan approval.
- Pre-approval (Conditional Approval): Pepper often issues a conditional approval, usually within 2–3 business days. This is not a final offer, but it confirms you could get a loan of a certain size based on the information provided.
- Formal Approval & Settlement: After conditional approval, you can sign a Letter of Offer and proceed with the purchase. Final unconditional approval and fund settlement usually take longer, often 2–4 weeks from application. Pepper does a valuation on the property and verifies all documents. In many cases, loans can settle around 4–6 weeks after the property is under contract. If you’re refinancing, it might be faster since there is no property valuation.
So, in summary, you could see a decision from Pepper within a couple of days, but actual settlement from start to finish is more like 1–2 months. Compared to big banks, Pepper is generally faster on the approval front. Banks can take longer on negotiations with internal underwriters and processors.
One caveat: Pepper’s “fast approval” generally applies when a broker or loan officer does a complete job getting documents in order at the outset. If you’re missing paperwork or reapplying multiple times, it obviously adds time. Also, Pepper is less likely to delay for non-essentials, so in that sense, they trade some risk for speed.
What Else Does Pepper Money Offer
Pepper Money is not just about home loans. They offer a suite of lending products that can complement or replace bank products:
- Car & Equipment Loans. Pepper provides vehicle financing with a twist for eco-friendly drivers. They have special zero-deposit Electric Vehicle (EV) loans which come with a lower comparison rate for qualifying electric cars. Pepper’s car loan division also offers financing for trucks and business vehicles. In general, their personal vehicle loans have competitive interest rates (often fixed) and quick turnaround. They even finance used vehicles up to 16 years old.
- Personal Loans / Debt Consolidation. For non-mortgage borrowing, Pepper runs a branded personal loan service. Unsecured personal loans up to $50k and secured loans up to $100k are available. These can be used for caravans, home improvements, holidays, or simply consolidating debt into one loan. Interest rates for personal loans are fixed, and Pepper offers no application fee or monthly fee on personal loans. A drawn-out credit card situation or small debt can often be rolled into a Pepper personal loan at a lower interest rate.
- Commercial Lending. Pepper Money has a full commercial finance arm. They fund commercial property purchases via Commercial Investment Loans, SMSF Loans, and commercial mortgages. They also provide asset finance for businesses to buy vehicles, equipment and machinery via lease or loan. Their commercial rates and policies are separate from home loans, but it’s worth noting that Pepper can fund nearly all types of property and equipment for SMEs and investors.
- Refinance and Debt Management. Given their expertise in risk assessment, Pepper is known for refinancing customers that banks won’t. If you have trouble with credit or need to consolidate debts, Pepper can be a consolidation lender. They also assist customers seeking financial counselling or hardship arrangements via internal support teams.
- Government Schemes and Coaching. While not a product, Pepper “offers” advice and access to programs. For example, they actively participate in first-home buyer government guarantees such as the First Home Guarantee). They publish resources explaining stamp duty concessions, the New Home Guarantee, etc. Pepper also sponsors financial literacy seminars and partners with home insurance companies for discounts.
So, beyond home loans, Pepper Money behaves much like a full-service finance company. They do not offer checking accounts or savings accounts, nor do they underwrite credit cards. But if you need any loan or lease, from buying a car to setting up an SMSF loan, Pepper has a solution.
What Are Some Pepper Home Loans Customer Reviews?
Customer feedback on Pepper Money’s home loans is largely positive, especially around service. Independent rating site ProductReview.com.au gives Pepper Money Home Loans 4.2 out of 5 stars from over 1,300 reviews.
Many 5-star reviews highlight Pepper’s responsiveness and empathy. For instance, one reviewer wrote, “Pepper Money stepped up and were able to approve my application on the same day… They were caring enough to understand our situation.”. Another said they got “prompt responses, friendly and informative staff” who treated them “as a human rather than a number”. These testimonials suggest Pepper excels at customer service.
That said, no lender is perfect. Some of the less enthusiastic reviews (on forums and ProductReview) note higher-than-expected interest costs or confusion about fees. A few borrowers mention that after funding the loan, they lost touch with their Pepper contact. And, as with any credit provider, some applications are declined, which naturally draws complaints (usually about personal circumstances, not about Pepper per se). However, these negative comments are relatively few; Pepper’s overall rating remains solid.
In summary, Pepper Money’s customers especially highlight:
- Outstanding service: Multiple people rated them “10/10” for customer care. The staff “explained everything” patiently to first-home buyers.
- Honest and transparent dealings: Reviewers say Pepper gave clear instructions and “no surprises” during the process.
- Lender of last resort: Many testimonials come from buyers who were turned away by mainstream banks. They report feeling grateful to Pepper for taking their complicated file and getting them financed.
- Quick resolution of issues: Some stories mention Pepper stepping in under deadline pressure and delivering in time.
Is Pepper Money An Ethical Australian Bank?
Pepper Money is actually not a bank in the traditional sense. It is an APRA-regulated, Australian-owned finance company. Technically, it holds an ADI license, so deposits are covered by the FCS, but its culture and structure are those of a specialist lender rather than a retail bank. As such, calling it an “ethical bank” would be a bit of a stretch – Pepper is a for-profit public company listed on the ASX, not a customer-owned mutual or credit union that markets itself on social impact.
However, in terms of corporate responsibility, Pepper Money puts significant emphasis on ethics and sustainability. The company has an Environmental, Social and Governance (ESG) framework and publishes annual sustainability reports. For example, Pepper’s 2024 ESG report highlights that the board has a dedicated committee overseeing responsible lending and climate change considerations.
In short, Pepper Money likes to portray itself as ethically-minded. They don’t lend for disallowed purposes (no payday loans financed, for instance), and they comply with modern regulatory standards like responsible lending laws and even modern slavery reporting. Compared to the big banks, Pepper might actually be more proactive about sustainability.
But for a first-home buyer, “ethical banking” usually means considering if your mortgage funds environmentally or socially harmful industries. Pepper does not advertise any restriction on the types of projects it finances. It’s primarily a neutral funder. Their ethics are more about how they run the company than about where the money goes.
So, is Pepper an ethical bank? Not exactly in the classic sense of a customer-owned “ethical bank.” But it is ethically run by conventional standards. It’s Australian-owned, has a sustainability charter, and tries to treat customers fairly.
How Does Pepper Money Compare To Other Banks?
Comparing Pepper Home Loans to the major banks or other lenders boils down to trade-offs:
Category | Pepper Money | Big Banks (e.g., Westpac, CBA) |
Interest Rates & Fees |
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Lending Criteria |
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Products & Flexibility |
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Customer Service |
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Regulation & Security |
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Innovation |
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Overall Summary |
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In a nutshell: Pepper offers a lifeline to borrowers who may not fit bank boxes, at the cost of a slightly higher price and fewer frills. If you have a straightforward high-income profile, the banks may give you a cheaper loan. But if you need flexibility, Pepper will likely be more accommodating. Pepper is a specialist insurer of loans; they will take on riskier mortgages for more fees, whereas the big banks are mass-market lenders that can afford to cherry-pick.
Bonus: How Much Can I Borrow From Pepper Money Personal Loan?
Pepper Money’s personal loans are separate from their home loans, but still worth mentioning. If you’re curious: Pepper offers personal loans for various uses. The key figures are:
- Loan Range: You can borrow as little as $5,000 up to $50,000 unsecured. If you secure the loan against an asset like a car or boat, you may borrow up to $100,000. For car purchases, the cap is $50k if that’s the asset securing the loan.
- Terms: Repay over 18 months to 7 years for unsecured loans. Secured loans, like for vehicles, can go up to 84 months.
- Rates: These are fixed-rate loans, with interest rates currently around 7–10% depending on term and security. The fact sheet shows a small fixed percentage.
- Eligibility: Must be 18+ and an Australian resident, with a stable income. The fact sheet shows that they even accept borrowers with one paid telecom default, which is quite lenient for a personal loan. They do not allow guarantors or loans for business purposes.
In short, borrowing power for a Pepper personal loan tops out at $100k or $50k unsecured. If you need more than that, you’d need a home loan or another source. But Pepper’s personal loans are a quick way to fund medium-sized expenses or debt pay-downs, with fast approvals similar to their home loans.
Pepper Home Loans FAQ's
Can I go directly to Pepper Money, or do I need a broker?
Pepper Money home loans are typically arranged through accredited mortgage brokers. They do not have public branches for walk-in customers. However, you can still apply directly via Pepper’s online application portal on their website. In practice, most first-home buyers use a broker. Going directly to Pepper Home Loans may limit your access to promotions that brokers know about.
Do Pepper Money loans allow offset accounts and redraw?
Yes. Pepper’s variable-rate owner-occupier home loans come with a 100% offset sub-account and a free redraw facility. This means all your extra repayments and savings up to the size of your loan can sit in an offset account, reducing interest. You can redraw any excess repayments with no fees at any time. These features are standard on Pepper’s Prime and Near-Prime loans.
Does Pepper Money cover LMI or any government guarantees?
Pepper itself does not charge traditional Lenders’ Mortgage Insurance (LMI). Instead, they charge a one-off Lender Protection Fee (LPF) on loans above 80% LVR. So, essentially, you have no monthly LMI premium, but a fixed fee that protects Pepper. Pepper is an approved lender for most first-home buyer programs (e.g. the First Home Guarantee). That means eligible first-home buyers can borrow up to 95% with only a 5% deposit and pay no LPF under the scheme.
Can overseas or non-resident applicants get a Pepper home loan?
Pepper Money generally requires at least Australian permanent residency to apply for a home loan. Their policies typically allow citizens and PR holders, and in some cases, a temporary visa with a very long remaining term (if a broker submits the deal). For foreign nationals or new arrivals, Pepper’s options are limited and usually high-risk.
Do Pepper home loans have a minimum deposit?
Yes, at least 5% of the property price is needed. Pepper won’t lend at 100% LVR (no-deposit), except through official government guarantee schemes. For first-home buyers, Pepper often advertises deals like “up to 85% LVR with no LPF, up to 95% with LPF”.
How quickly can I get money if I refinance with Pepper?
If you’re refinancing an existing home loan, Pepper can sometimes fast-track the payout. Since there’s no house purchase contract, the loan can proceed to settlement as soon as documents are in order. Some Pepper refinancing deals get final approval and settlement in as little as 2–3 weeks.
What if I miss a payment or go into financial hardship?
Pepper Money is subject to the Australian Banking Code and responsible lending laws. If you hit hard times, you can apply for hardship assistance by contacting Pepper’s Financial Support team. Pepper’s policy is to work with customers (within the law) to restructure loans where needed. They provide financial hardship forms on their site. However, remember: missed payments can damage your credit, so borrow only what you can afford. For first-home buyers, always budget with a buffer.
Can I switch from an interest-only to a principal-and-interest loan (or vice versa)?
Yes. On Pepper loans, if you start with an interest-only period (say, 5 years), you will eventually be required to revert to principal-and-interest. You can also request to switch early. Pepper allows extra repayments at any time, so you can pay down or upsize. Changing loan type is possible but will involve a formal process. Pepper Home Loan’s advantage is that there are no early repayment penalties, even on fixed loans, so you have the flexibility to adjust your strategy.
Are broker fees or commissions an extra cost?
No. When you borrow through a mortgage broker, Pepper pays the broker’s commission – you don’t pay your broker separately on top of Pepper’s fees. The interest rate Pepper quotes already factors in the normal commission. Just ensure you understand any loan origination fee Pepper charges, as that is your cost.
Conclusion: Is Pepper Home Loans Right For You?
Choosing the right home loan comes down to your personal circumstances, and Pepper Money fills a unique space in the market. If you’re someone with a spotless credit history, consistent income, and a solid deposit, a big bank may offer you a lower interest rate and more packaged perks. But if your situation is more complex—say you’re self-employed, have a few credit hiccups, or need to borrow with a low deposit—Pepper could be the game-changer you’ve been looking for.
Pepper Home Loans specialises in flexible lending. They look beyond the traditional credit score to assess your real financial story. Whether you’ve got multiple income streams, a past default, or are working with an unusual asset (like using an older vehicle for security), they’re more open-minded than the major banks. They also offer fast turnaround times and alt-doc options, which can make a real difference when timing is tight.
That said, flexibility comes with a slightly higher price. Interest rates may be above what you’d get from a major bank, and you’ll want to factor in fees like the monthly administration charge or the Lenders Protection Fee (LPF) on high-LVR loans.
So, is Pepper right for you? If your bank said “no,” Pepper might say “let’s have a look.” They’re not for everyone, but for the right borrower, they can be the perfect fit. It’s always best to speak with a mortgage broker who can assess your situation and guide you toward the most suitable lender.
Next Steps And Getting Your Home Loan Approved
Ready to buy a house but don’t know where to start? Our team at Hunter Galloway is here to help you buy a home in Australia. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please give us a call on 1300 088 065 or book a free assessment online to see how we can help.
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