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About Pepper Money

Pepper Money is a non-bank lender that was founded in 2000 to provide Australians with a more flexible home loan option compared against conventional banks. Unlike traditional bank lenders, Pepper Money’s home loans are funded via debt capital markets, rather than customer deposits.

Pepper Money is an environmentally-minded company, planting seven hectares of forest across Australia, New Zealand and the Philippines in 2021. It also maintains a seedling nursery to support the future planting of trees throughout Australia and New Zealand. Pepper Money is partnered with community organisations such as Women’s and Girls Emergency Centre, Panthers on the Prowl and St Kilda Football Club.

Pepper Money home loans at a glance

Offset accounts available
Redraw facilities available
Line of credit available
Split rate option available
Green loan available
Ability to make extra repayments
Internet banking available
Salary crediting
Choice of repayment flexibility
Refinance available
Services first home buyers

What types of home loans does Pepper Money offer?

Pepper Money’s range of home loan products on offer currently includes:

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Who does Pepper Money lend to?

Pepper Money offers home loans for first home buyers, refinancers, property investors and more. Being a non-traditional lender means they don’t offer package loans, line of credit loans and more non-conventional types of home loans you might see from traditional lenders.

When it comes to what types of borrowers Pepper Money lends to, there are a few points that prospective borrowers should keep in mind.

The first is that Pepper Money has a minimum required loan-to-value ratio (LVR) of 95%, meaning it is unlikely that you will be approved for a home loan with Pepper Money if your saved deposit is less than 5% of your total proposed loan size.

Pepper Money also likely won’t give you a home loan if you don’t have the capacity to repay your proposed home loan at a rate 3% higher than the advertised interest rate. This is because the Australian Prudential Regulation Authority (APRA) requires all lenders to assess an applicant’s ability to service their proposed home loan in the event of interest rate hikes.

Can I get a Pepper Money home loan as a first home buyer?

Yes, Pepper Money provides home loans to first home buyers. While they don’t have a specific home loan product for first home buyers, they have several tools and resources available to help them navigate the process of buying a home for the first time.

Does Pepper Money offer the Home Guarantee Scheme?

No, Pepper Money isn’t one of the 33 participating lenders chosen by the Federal Government to offer the Home Guarantee Scheme. Applications for one of these schemes can only be made through a participating lender or a mortgage broker acting as an authorised representative of a participating lender; if you were hoping to access the scheme as part of your home loan application, you may want to apply with a different lender.

Can you refinance your home loan with Pepper Money?

Yes, you can switch your home loan to Pepper Money from another bank by refinancing. Borrowers refinancing their loan with Pepper Money can choose either a fixed, standard variable or split rate loan to switch to and can choose a redraw facility and/or an offset account with eligible loans.

Borrowers refinancing with Pepper Money will need to have enough equity for an LVR of 90% or less, and can consolidate an unlimited number of debts into their new Pepper Money home loan provided it doesn’t push their LVR above 90%.

Does Pepper Money charge Lenders Mortgage Insurance (LMI)?

Unlike most other home loan providers, Pepper Money doesn’t charge lenders mortgage insurance (LMI). However, they do charge what they call ‘risk fees’ on home loans where the borrower has less than 20% of the loan value saved as a deposit.

Pepper Money charges two types of risk fee:

  • A Lender Protection Fee (LPF), which is used to offset the risk associated with higher-LVR loans.
  • A Mortgage Risk Fee (MRF), which functions similarly to LMI in that it exists to protect the lender against the risk of you defaulting on your mortgage repayments.

Both fees can either be paid upfront or rolled (i.e. capitalised) into your home loan amount, so long as doing so doesn’t push your LVR above 95%.

What home loan fees does Pepper Money charge?

As of 16 May 2024, Pepper Money charges the following fees across its range of home loans. Please note that not every fee listed may apply to every home loan offered by Pepper Money and that these fees are subject to change without notice.

  • Establishment fee – $559 for Prime loans, $995 for all other loans
  • Monthly administration fee – $10 for Prime loans, $15 for all other loans
  • Legal fees – from $330
  • Discharge fee – $500
  • Title protection fee – $400

Interested in a Pepper Money home loan? Compare with us today!

If you want to learn more about Pepper Money home loans, you can use our home loan comparison tool to compare them against a wide range of other loan products from nearly 20 other lenders!

Comparing home loans with us means only being shown home loans you’re eligible to apply for, and having a dedicated team of Home Loan Specialists on-hand to help you with any questions you may have. And if you find a home loan that you think might be appropriate for you, you can apply for it then and there – entirely online, with no physical paperwork!

So, if you’re in the market for a home loan, compare your options today with Compare the Market!

Stephen Zeller, Home Loans Expert

Meet our home loans expert, Stephen Zeller

Stephen has more than 30 years of experience in the financial services industry and holds a Certificate IV in Finance and Mortgage Broking. He’s also a member of both the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and the Mortgage and Finance Association of Australia (MFAA).

Stephen leads our team of Home Loan Specialists, and reviews and contributes to Compare the Market’s banking-relating content to ensure it’s as helpful and empowering as possible for our readers.

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