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This type of loan is for those that have experienced financial problems in the past.

Non-conforming lending was set up specifically to cater for people that normal lenders would not look to lend to due to, past credit problems that have now been fixed, or for borrowers with current credit problems.

Non-conforming home loans are in most cases no different to other home loans in the variety of choices that are available such as variable, fixed and split rate loans, line of credit and other features such as redraw facilities and mortgage offset.

Because the borrowers are regarded as slightly higher risk, most lenders charge a higher interest rate (generally 1 to 2% higher) and charge higher fees than for traditional loans.