Private Home Loans: Borrowing From a Private Lender for Your Home
A private home loan on your own home is regulated credit. Who lends, when self-employed owners use one, the warning signs and how to refinance off it.
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Private Home Loan · Regulated Credit · Refinance Pathway
Most private lenders will not lend on the home you live in, and the ones that do play by consumer credit rules. Here is who lends, the triggers that put a self-employed owner on a private home loan, and how you get back off it.
Quick Answer
A private home loan is a loan on the home you live in from a lender outside the major banks, and it is regulated owner-occupied credit whoever the lender is. That means a licence, responsible lending and a planned exit. Self-employed owners use one to get past a short-term problem, then refinance. See how private lending works for business owners, and where a one doc home loan fits on the way back.
Also called: private home mortgage, private lender home loan, non-bank home loan. A non-bank home loan from a licensed specialist lender is not always "private"; this insight says which is which.
What is a private home loan?
A private home loan is a loan secured on the home you live in from a lender outside the major banks, either a licensed non-bank lender or a private funder lending under the same consumer rules. Search results lump the two together, and so do a lot of comparison pages, but they behave differently once you are inside a deal.
A non-bank lender usually runs a standing home loan product with written credit policy, a long loan term and pricing set by risk grade. A private funder, typically a mortgage fund or a pool of investors run by a manager, mostly lends to businesses on short terms against property. Private lending in that second sense is built for business purposes, which is why so few private funders will touch the borrower's own home.
Is a non-bank home loan the same as a private home loan?
A non-bank home loan is not always the same as a private home loan, even though most of what gets sold as a private home loan is in fact a non-bank one. The difference that matters to you is cost, term and how the lender expects you to leave. Where the money behind each type comes from is covered in how private lending works, and who private lenders are in general is in our private mortgage lenders guide.
Can a private lender lend on the home you live in?
A private lender can lend on the home you live in, but only as regulated owner-occupied credit, and that brings the full consumer credit rules with it. The National Credit Code covers credit provided for personal, domestic or household purposes, as set out in ASIC's National Credit Code guidance. Buying, refinancing or improving the home you live in sits squarely inside that.
So the loan has to come from a lender with an Australian credit licence, and responsible lending applies. The lender must make reasonable inquiries about your financial situation, requirements and objectives, take reasonable steps to verify what you tell it, and not enter a contract that is unsuitable for you. A regulated private lender still tests serviceability; it may simply read a self-employed owner's income with more flexibility than a major bank.
That compliance load is the reason many private funders decline owner-occupied deals outright. A licence, membership of the Australian Financial Complaints Authority and responsible lending files do not fit a short-term business lending model. The wider regulation picture for private lending is covered end to end in the private lending guide, and a bank's private banking division, which is a different product altogether, is explained in private banking mortgages.
Can a lender use a business purpose declaration on your home loan?
A lender can only rely on a business purpose declaration when the money really is mainly for business, and on a family home that line is easy to cross. The declaration is a signed statement that the money is mainly for business. Where that is true, for example equity in the home released to fund stock, equipment or a tax bill, the loan can sit outside the Code. Where the money is really for buying, refinancing or renovating the home you live in, the paperwork does not change what the loan is for.
The National Credit Code deals with this directly in section 13, "Presumptions relating to application of Code". A declaration does not protect the lender where it knew, had reason to believe, or would have found out with reasonable inquiries that the credit was really for personal, domestic or household purposes. The pressure usually arrives late in the piece: a funder says the deal can settle this week if you borrow through your company and sign the declaration. That is the moment to stop.
Whether a loan on your home is regulated credit, and what a declaration you have already signed means for you, are questions for your solicitor, not your broker.
When do self-employed borrowers use a private home loan?
Self-employed borrowers use a private home loan when a bank cannot say yes in the time or on the evidence available, and the gap is expected to close. These are the triggers that put you on a private home loan, as they land on our desk:
- Recent credit defaults. A default or a paid judgment still recent enough that a major bank's scorecard declines the file before a person reads it.
- ATO debt on a payment plan. Many banks will not refinance while a tax debt is outstanding, even when the plan is being met.
- A short ABN history. The business is trading well but has not yet produced the run of tax returns a full doc lender expects, which varies by lender.
- A settlement deadline a bank cannot meet. A contract date, a refinance falling over late, or a lender that has gone quiet with days to go.
- Income a bank will not read. Profits left in a company, heavy add backs or a recent jump in turnover that the last lodged return does not show yet.
None of these is permanent, and that is the point. A private home loan suits a problem with an end date. If the problem has no end date, the loan only delays it at a higher price. The files that go well are the ones where the exit lender was picked before the private loan was signed. How a self-employed file is read in general is in the self-employed home loans guide.
How does a private home loan differ from a bank home loan?
A private home loan differs from a bank home loan mainly in cost, term and what the lender accepts as evidence; when the security is your home, the regulation is the same.
| Question | Private home loan | Bank home loan |
|---|---|---|
| Who lends | A licensed non-bank lender or, less often, a private funder lending as regulated credit | A major or regional bank under its own credit policy |
| Regulation | National Credit Code and responsible lending; the lender needs an Australian credit licence | The same Code, the same responsible lending, the same licence requirement |
| Documents asked for | Often lighter: BAS, business bank statements, an accountant's letter or an asset position, varies by lender | Typically personal and business tax returns, notices of assessment and financials |
| Typical LVR (indicative) | Usually lower than a bank, because the property carries more of the risk; varies by lender and location | Higher, with lenders mortgage insurance above the lender's set point |
| Typical term | Non-bank: a standard long home loan term. Private funder: short, typically months to a few years | A standard long home loan term |
| Cost (indicative) | Higher rate and establishment fees, priced by risk grade, varies by lender | Lowest pricing, for borrowers who fit policy |
| Exit | Planned from day one: a refinance once the trigger clears | None needed unless circumstances change |
Sources: Australian Securities and Investments Commission, National Credit Code, last updated 1 August 2025. Read 13 October 2026. Cost, LVR and document rows are indicative broker observations, not lender policy.
How do you refinance a private home loan back to a bank or specialist?
You refinance a private home loan back to a bank or specialist by clearing the trigger that put you there, then giving the new lender the evidence it needs to see that it has cleared.
- Fix the trigger. Pay or settle the default, keep the ATO plan current or pay it out, and get overdue returns lodged.
- Build the clean conduct period. Lenders want to see repayments made on time for a stretch before they take you on. How long that clean conduct period needs to be varies by lender.
- Lodge the latest tax returns. A full doc lender can only read the income your returns show.
- Check the valuation. The property's value sets how much a new lender will refinance, so test it before you apply.
- Price the exit. Early repayment, discharge and new lender costs all come out of the saving, so count them first.
A step back to a bank does not have to mean a full doc bank on day one. A one doc home loan or low doc loan from a specialist can be the middle rung while your returns catch up, and how a lender treats a file still carrying a private mortgage is covered separately. For the exit itself, see exiting short-term property finance into a term loan, the exit strategy entry, and when a self-employed borrower should refinance.
What are the warning signs with a private home loan?
The warning signs with a private home loan are the ones that suggest a lender is trying to sit outside consumer credit rules, or has priced the loan so the exit fails.
- No credit licence you can check. A lender on your home should be able to name its Australian credit licence.
- A business purpose declaration on a family home. Especially when the money is clearly for the home itself.
- Fees before approval. Upfront "commitment" or "due diligence" fees before any written approval.
- Steep default interest. A default rate that jumps sharply on one missed payment.
- No complaints scheme. No membership of the Australian Financial Complaints Authority.
Works
- A trigger with a clear end date
- Exit lender picked before you sign
- Licensed lender, regulated contract
- Repayments met from current income
Stalls
- No date the problem clears
- Declaration pushed on a home purchase
- Interest capitalised with no exit
- Fees paid before any approval
How to check a private lender before you sign is set out in the private mortgage lenders guide linked above. If you want to know which side of the line your file sits on, check eligibility or speak to a broker before a funder's deadline sets the terms.
A private home loan is regulated credit when the security is the home you live in, so the lender needs a licence and must lend responsibly, whether it is a non-bank lender or a private funder. Self-employed owners use one to get past a default, an ATO plan, a short ABN history, a deadline or income a bank will not read, then refinance once the trigger clears. A business purpose declaration on a family home is the red flag to stop on.
Key takeaway: only take a private home loan when you can name the trigger, the date it clears and the lender you will refinance to.Frequently Asked Questions
You can get a private home loan on the home you live in, but only from a lender that offers it as regulated credit under the National Credit Code. Many private funders will not lend on an owner-occupied home for that reason, so most of these loans come from licensed non-bank lenders. The private lending page covers the business-purpose side.
Private home lenders are the lenders outside the major banks that will secure a loan on the home you live in, mostly licensed non-bank lenders and a smaller number of private funders lending as regulated credit. They differ in what they accept as evidence of income and in how they price risk. Our private mortgage lenders guide explains how to check one.
Some private lenders do home loans, but most private funders lend for business purposes and avoid the borrower's own home because it brings consumer credit obligations. Those that do lend on a home must hold an Australian credit licence and follow responsible lending. How private lending works explains where the money comes from.
A private home loan on the home you live in is regulated, because credit for personal, domestic or household purposes falls under the National Credit Code. That brings responsible lending and the licence requirement with it, whoever the lender is. A business purpose declaration does not change that where the money is really for the home.
How long people stay on a private home loan depends on how long the trigger that put them there takes to clear, and it is usually planned as a bridge to a cheaper loan rather than a long-term home. The clean conduct period lenders want before a refinance varies by lender. Planning the exit from a private lender covers how to set the date.
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