Pepper Money Home Loans - What Are The Pros And Cons?

Angela Moss0

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Knocked back by the major banks? Having trouble getting a loan due to your non-traditional income, bad credit issues, or self-employed status? Then a specialist lender like Pepper Money may offer a home loan solution to suit you.

Pepper Money is considered to be a non-bank specialist lender. Non-banks are not funded like traditional banks. And specialist lenders typically offer financial situations to clients that risk-averse lenders may pass on.

If you are an Australian looking to buy a home, investment property, or are after refinancing options... And, if you are curious about, or are considering Pepper Money home loans... Then this article is for you.

We’ll delve into Pepper Money’s products and explore the pros and cons of a Pepper Money home loan. Also, we’ll look into the application process, turnaround times, what type of reputation they have as a lender, and the types of services they provide.

Who Is Pepper Money? And What Services Do They Provide?

Pepper Money is what is known as a non-bank lender. This means that they are not like a typical, traditional bank, funded by customer deposits. Pepper Money is funded through capital raising and investors.

Pepper Money was founded in Australia in 2000 by a private equity investment firm and has its headquarters located in Sydney, NSW. Pepper Money has now branched out internationally, operating in New Zealand, Asia, and the UK.

Pepper Money doesn’t have brick-and-mortar branches available to customers. They operate completely online which means they have fewer overheads than traditional banks and lenders with physical branches. Operating this way facilitates passing on savings in operating costs to the customer.

Considered to be a lending specialist, Pepper Money solely operates to provide loan solutions and doesn’t extend into other banking services. You won’t be able to solely take out your transaction account, credit cards, and other banking products with a loan specialist like Pepper Money. Although, they do offer offset interest accounts linked to their home loan products with Visa and Mastercard debit cards.

Pepper Money’s services cover the standard types of loan products the typical customer is after, such as:

  • Home loans.
  • Car loans.
  • Personal loans.

Being a specialist lender, they provide lending solutions for those with:

  • bad credit issues,
  • the self-employed,
  • those having trouble reaching traditional proof of income criteria, and
  • those requiring low doc or alt doc home loans.

However, their financial products may be a good option for anyone having trouble acquiring a loan from banks and other lenders.

Pepper Money has a reputation for great customer service and competitive interest rates in the specialist lender space. In fact, they’re award winners.

They took home the RFi Group 2021 Best Specialist Lender Award, which they’ve received for 9 years running. And they were recognised in 2021 for the Non-Bank of the Year Award from the Australian Mortgage Awards.

Is It Safe To Take Out A Loan With A Non-Bank Lender, Like Pepper Money?

Some people have reservations about taking out a loan with a non-bank lender. This is because a non-bank will not have a banking licence. And thus, they don’t have Government guarantees when it comes to your money.

So, what happens if your non-bank of choice goes down the tube?

Fear not, as reputable nonbanks are safe. If a non-bank goes bust, your loan will be sold to a different financial provider.

In fact, Pepper Money’s investment history showcases just what will happen when non-banks reach insolvency. During the Global Financial Crisis, some of Pepper Money’s competitors didn’t make it. And their loans we’re sold onto Pepper Money for continued servicing.

Breakdown of Pepper Money Home Loan Options

What kinds of home loan options does Pepper Money provide?

They specialise in providing loan solutions to those who have had trouble landing a loan with big banks and other lenders with stringent eligibility criteria. They’re willing to take on people with non-traditional income streams, short employment timelines, bad credit history, and other circumstances other banks and lenders might avoid.

But if you don’t fall into the complex home loan application category, they’ll have mortgage products to suit you too. Also, regardless of whether you’re an owner-occupied homebuyer or property investor, they’ll have home loan options available.

Pepper Money will base your rate on your credit score and financial situation. However, they do take a common-sense approach when it comes to assessing applications and assess on a case-by-case basis.

So, without further ado, let’s look at Pepper Money’s home loans.

Pepper Essential

This is Pepper Money’s home loan option for those that don’t have past credit issues. It’s suitable for those that may just fall short of making the cut with other banks and lenders. It’s also available to those who would qualify for non-specialist lenders.

Here’s what you can expect:

  • A variable rate.
  • Interest-only repayments are available.
  • Free redraw facility.
  • You can consolidate up to 4 debts with this loan.
  • A 100% interest-offset account linked to your home loan.
  • No requirement for lenders’ mortgage insurance (LMI).
  • Extra payments are allowed.
  • You can borrow up to 95% LVR (loan-to-value-ratio) and 90% LVR for refinancing.

Pepper Easy

This is Pepper Money’s home loan option for those with a few credit issues in their history. If you’ve been free from credit incidents in the last 2 years, this loan option may be for you.

Here’s what you can expect:

  • Variable interest rates.
  • Alternative options for assessment of income.
  • A redraw facility.
  • No requirement for lenders’ mortgage insurance (LMI).
  • A 100% interest-offset account linked to your home loan.
  • Interest-only repayments are available.
  • You can consolidate an unlimited number of debts.
  • Flexible repayment options.
  • Extra payments are allowed.
  • Split loan facility.
  • Variable interest rates.
  • Unlimited cash-out option for accepted uses, such as renovations and business use (up to 90% LVR).
  • You can borrow up to 95% LVR, and 90% if refinancing.

Pepper Advantage

If you’ve experienced knock-backs from other banks and lenders due to credit history problems and other challenges, then this could be the loan option to suit your needs.

Here’s what you can expect:

  • Acceptance of defaults and credit issues lodged less than 12 months ago.
  • If you’ve had mortgage arrears in the last 6 months, this will be accepted.
  • You can consolidate an unlimited number of debts.
  • No requirement for lenders’ mortgage insurance (LMI).
  • Alternative options for assessment of income.
  • Redraw facility.
  • A 100% interest-offset account linked to your home loan.
  • Split loan facility available.
  • Variable interest rates.
  • Unlimited cash-out option for accepted uses, such as renovations and business use (up to 85% LVR).
  • Extra payments are allowed.
  • Flexible repayment options.
  • You can borrow up to 95% LVR, and 85% if refinancing.

Eligibility For Pepper Money Home Loans

In order to apply for a Pepper Money home loan, you will need to meet the following criteria:

  • An Australian citizen or permanent resident.
  • Be over the age of 18.
  • Have an income source in order to service the loan.

Pepper Money specialises in non-traditional home loan applications. This means they have broader eligibility than other online-only banks and traditional lenders.

This makes Pepper Money a suitable option for people with more complex financial situations, such as the following categories:

Applying for a Home Loan With Pepper Money

You can apply for a Pepper Money home loan online or through a mortgage broker.

They have quick approval times and turnaround times, depending on your situation and the level of documentation required. A mortgage broker, like YouBroker will be able to seamlessly guide you through this process and advise you on what information to have ready.

Pepper Money Home Loans - The Pros And Cons

No matter which lender you decide to take out a loan with, they’ll all have certain pros and cons. A good way to decide if they’re the lender for you is to weigh them up in relation to your individual situation.

So, with that in mind, have a look at the pros and cons of Pepper Money as a home loan lender.


  • They can give you a rate estimate before you apply for a loan.
  • Their rates and fees are competitive with other specialist lenders out there.
  • They are renowned for great customer service and efficient processes.
  • They offer award-winning home loan options.
  • Non-genuine savings are accepted by Pepper Money.
  • They’re a specialist lender, making them a suitable option for self-employed, casual, and contract employees, those with bad credit history, and those in need of alt doc loans or low doc loans.
  • They have a common-sense approach to assessing home loan applications.
  • Quick loan approvals. This can make all the difference when trying to land your dream home.
  • They work within the mortgage broker network.
  • They offer commercial property loans.
  • They lend to both owner-occupied borrowers and investment property borrowers.
  • You can consolidate your debts.
  • They have flexible payment options.


  • Pepper Money is an online lender. Therefore you won’t be able to visit a brick-and-mortar branch if that is your preference.
  • Although they have in the past, at this time, they do not offer construction loans.
  • They don’t offer fixed-rate home loans.
  • Their interest rates are generally higher than that of other banks. However, this is typical for specialist lenders.
  • Although they don’t have LMI, their risk fee is similar and can be high.

Disclaimer: The above information was correct at the time of publication. Note that banks and lenders may change their products and policies from time to time. For the most up-to-date information and insider knowledge on banks, lenders, and their products. You may consider working with a mortgage broker, like YouBroker.

The Wrap Up

Being knocked back for a home loan can be stressful. And being repeatedly rejected by banks and lenders can make you feel like your home buying journey may never come to pass.

But if you’ve experienced setbacks along your real estate journey, Pepper Money may offer you the solutions you’re looking for. They’ll consider applications from people in a range of circumstances that some of the major banks and lenders won’t take on.

With award-winning home loan products and a reputation for great customer service, they’re often considered a reputable option by mortgage brokers. Particularly for clients experiencing difficulties in landing a loan.

Their flexible home loan eligibility criteria and competitive specialist home loan rates make Pepper Money a popular choice for complex mortgage applicants.

If you’d like more information to see if Pepper Money is a suitable option for your financial situation, then why not get in touch with a mortgage broker, like YouBroker, today?

Next Steps

Are you looking for a home loan but have a non-traditional income? Do you expect to have a complex mortgage application? Or maybe you’re just after help to find the best deal for your individual financial situation?

Here’s the thing... Having repeated rejections for mortgage applications may have a detrimental effect on your credit score. But working with a reputable mortgage broker, like YouBroker can help to avoid this and other property finance pitfalls.

We can help you with all of the above and more. YouBroker has a team of accredited and experienced people to help you with your real estate or refinancing journey.

At YouBroker, we have a fully online process to offer you maximum convenience. Apply, update and check your status when it suits you.

We work with you to understand your goals and individual needs, to:

  • Compare our network of banks and lenders to find the best deals and rates.
  • Work out your borrowing power.
  • Guide you through the application process, every step of the way.
  • Provide expert advice and insight into the real estate buying and refinancing process.
  • Help you with budgeting so you can reach your goals sooner.

If navigating the mortgage process is getting to be overwhelming, YouBroker is here to help.

Interested in working with us? We’d love to hear from you.

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