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Find and compare line of credit home loans

Showing home loans based on a loan of
$
with a deposit of
Advertised Rate

2.79

% p.a

Variable

Comparison Rate*

2.83

% p.a

Company
Repayment

$698

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.97

/ 5
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More details
Advertised Rate

2.79

% p.a

Variable

Comparison Rate*

2.83

% p.a

Company
Repayment

$698

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.97

/ 5
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More details
Advertised Rate

2.59

% p.a

Variable

Comparison Rate*

2.63

% p.a

Company
Repayment

$1,359

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.94

/ 5
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More details
Advertised Rate

2.59

% p.a

Variable

Comparison Rate*

2.63

% p.a

Company
Repayment

$1,359

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.94

/ 5
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More details
Advertised Rate

2.89

% p.a

Variable

Comparison Rate*

2.93

% p.a

Company
Repayment

$723

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.92

/ 5
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More details
Advertised Rate

2.89

% p.a

Variable

Comparison Rate*

2.93

% p.a

Company
Repayment

$723

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.92

/ 5
Go to site
More details
Advertised Rate

2.69

% p.a

Variable

Comparison Rate*

2.73

% p.a

Company
Repayment

$1,375

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.70

/ 5
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More details
Advertised Rate

2.69

% p.a

Variable

Comparison Rate*

2.73

% p.a

Company
Repayment

$1,375

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.70

/ 5
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More details
Advertised Rate

3.04

% p.a

Variable

Comparison Rate*

3.08

% p.a

Company
Repayment

$760

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.92

/ 5
Go to site
More details
Advertised Rate

3.04

% p.a

Variable

Comparison Rate*

3.08

% p.a

Company
Repayment

$760

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.92

/ 5
Go to site
More details
Advertised Rate

3.14

% p.a

Variable

Comparison Rate*

3.18

% p.a

Company
Repayment

$785

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.92

/ 5
Go to site
More details
Advertised Rate

3.14

% p.a

Variable

Comparison Rate*

3.18

% p.a

Company
Repayment

$785

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.92

/ 5
Go to site
More details
Advertised Rate

4.39

% p.a

Variable

Comparison Rate*

4.67

% p.a

Company
Repayment

$1,649

monthly

Features
Redraw facility
Offset Account
Borrow up to 65%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.99

/ 5
Go to site
More details
Advertised Rate

4.49

% p.a

Variable

Comparison Rate*

4.67

% p.a

Company
Repayment

$1,666

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.99

/ 5
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More details
Advertised Rate

4.99

% p.a

Variable

Comparison Rate*

5.37

% p.a

Company
Repayment

$1,752

monthly

Features
Redraw facility
Offset Account
Borrow up to 75%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.99

/ 5
Go to site
More details
Advertised Rate

4.99

% p.a

Variable

Comparison Rate*

5.39

% p.a

Company
Repayment

$1,752

monthly

Features
Redraw facility
Offset Account
Borrow up to 80%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.99

/ 5
Go to site
More details
Advertised Rate

4.64

% p.a

Variable

Comparison Rate*

4.71

% p.a

Company
Repayment

$1,160

monthly

Features
Redraw facility
Offset Account
Borrow up to 79.99%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.90

/ 5
Go to site
More details
Advertised Rate

4.35

% p.a

Variable

Comparison Rate*

4.72

% p.a

Company
Repayment

$1,088

monthly

Features
Redraw facility
Offset Account
Borrow up to 85%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.86

/ 5
Go to site
More details
Advertised Rate

2.84

% p.a

Variable

Comparison Rate*

2.88

% p.a

Company
Repayment

$1,398

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.33

/ 5
Go to site
More details
Advertised Rate

2.84

% p.a

Variable

Comparison Rate*

2.88

% p.a

Company
Repayment

$1,398

monthly

Features
Redraw facility
Offset Account
Borrow up to 70%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

2.33

/ 5
Go to site
More details

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Home loan lenders we compare at RateCity

Learn more about home loans

How does a line of credit loan work?

Borrowers who have built up some equity in their home, but are looking for some extra financial flexibility, may be interested in a line of credit (LOC) loan.

A line of credit functions similarly to a credit card, where you have the flexibility to borrow and repay money up to a certain credit limit. This limit is typically based on the equity in your home, though you may only be able to access a limited percentage of this equity.  

For example, imagine you previously bought a $500,000 home, and currently have $200,000 equity in the property, with $300,000 still owing on the mortgage.

If you applied for a line of credit for 80 per cent of your equity, you’d be able to borrow up to $160,000 at maximum from your credit account.

You may be able to access money from your line of credit by writing cheques, or by using a debit card.

What are the features of a line of credit loan?

The key features of the line of credit loan are:

  • During the life of the loan you can withdraw money as you need it, without having to notify the lender about what the funds are being used for each time you withdraw.
  • You can access the loan to borrow money repeatedly, so long as you make enough repayments to keep the total amount you’ve borrowed under the maximum credit limit.  
  • You’re only charged interest on how much you’ve currently borrowed, rather than on your maximum credit limit.
  • You can pay back any amount as long as you make the minimum monthly payments set by the lender. Minimum monthly repayments may be a combination of interest and principal, or interest only.
  • The interest rate is usually higher than the standard variable rate charged by banks and financial institutions on home loans, but below the typical interest rate charged on personal loans or credit cards.

How does a line of credit loan differ to a personal loan?

The line of credit loan is different to a standard personal loan, where you borrow a lump sum that you’ll repay with interest over a fixed loan term. A line of credit instead allows you to borrow and repay money as you choose, and only pay interest on what you’ve currently borrowed.

Personal loans may be available with variable or fixed interest rates, with fixed rate allowing you to budget for consistent and regular repayments. Lines of credit are more likely to charge variable rates of interest, so it’s possible that the amount of interest you're charged could change in time.

While secured personal loans are available (for example, many car loans) unsecured personal loans are also an option. Lines of credit that are secured against you home equity are more likely to have lower interest rates than many personal loans.

Keep in mind that line of credit personal loans also exist, and also function much like a credit card with a higher than average credit limit. However, because a line of credit home loan is secured by your home equity, it will typically have a higher credit limit and lower interest rate than a line of credit personal loan.

How does a line of credit loan differ from a credit card?

Lines of credit typically function similarly to credit cards, allowing you to borrow and repay money when you choose. However, because credit cards are typically unsecured, a line of credit will often have a lower interest rate and higher credit limit.

This is why some borrowers choose to opt for a line of credit, rather than simply increasing their existing credit card limit or applying for a second credit card.

What would you use a line of credit loan for?

Lines of credit are often used for:

  • Home renovations and repairs
  • Buying another property
  • Taking a holiday
  • Buying a car

For example, you may have equity in your home and are considering a series of repairs and minor alterations.

If you don’t have a firm idea of how much money you will need in your renovation budget, opening a line of credit can give you the flexibility to pursue your project, knowing you can draw down funds to cover the costs of each job, making repayments as you go.

Being smart about your line of credit loan

Financial discipline and organisation will help you manage your debt on a line of credit loan. There are several simple ways you can utilise its features to your full advantage:

  • One common way of reducing the cost of the loan is to have your income deposited into your line of credit loan account instead of your bank account, to offset the overall loan amount. That way, the interest on the loan is only calculated on the remaining balance of the account, lowering your overall interest charges. You can then use the line of credit to help manage your everyday cash flow.
  • Any extra income you receive, such as a tax refund, can also be deposited into the account as an additional repayment, contributing to reducing the interest payable.
  • Consider making a regular repayment of more than the minimum required amount a part of your monthly or fortnightly budget. This could help to offset some of your financial risk if you spend more than you planned with your line of credit.
  • If property prices in your area are not increasing, try to be careful about your spending with your line of credit, in case your home’s value won’t be enough to cover everything you’ve borrowed if you end up in a tight spot and need to sell or refinance.

What should I be aware of with line of credit loans?

  • Line of credit home loans typically have higher interest rates than those of home loans offered by most banks and mortgage lenders.
  • Just like with a credit card, it’s tempting to only make the minimum repayments on a line of credit, until more interest charges have built up than you can comfortably afford to repay. Regular repayments that gradually reduce what you owe can make a big difference.
  • Most lines of credit require you to have a good credit rating to apply. Before you submit any applications, check your credit score and find out if you can do anything to improve it and meet the eligibility criteria. The better your credit history, the greater the likelihood of being offered a lower interest rate.
  • As with a standard variable loan, the interest rate on a line of credit loan is vulnerable to overall market movements. Ensure you have a realistic financial buffer in place in case of interest rate rises.
  • Some lenders  charge monthly or annual fees on their line of credit, as well as upfront application fees, valuation fees and discharge fees. You’ll need to factor all of these costs into your financial calculations when comparing line of credit loans from a range of different lenders.
  • As with more traditional secured loans, if a line of credit loan isn't repaid according to the terms of the contract, the lender may be able to seize your property in order to recoup the debt.
  • A line of credit loan isn't the only way to access equity in a property. A redraw facility or offset account can also be used to access money from your home loan, though these features work differently and may not suit every borrower.

Who offers line of credit loans?

Banks, credit unions and other financial institutions in Australia offer lines of credit, which can offer a valuable way to manage your finances when you require some flexibility as you work towards your goals.

Comparing line of credit loans can help you work out which option may best suit your financial situation, both now and in the future. If you need help, consider contacting a mortgage broker for advice.

Frequently asked questions

How does a line of credit work?

A line of credit functions in a similar way to a credit card. You have a pre-approved borrowing limit and can draw on as little or as much of that sum as you need it, with interest paid on the outstanding balance.

Popular products include Commonwealth Bank Viridian Line of Credit, ANZ Equity Manager, Westpac Equity Access and NAB Flexiplus.

What is a line of credit?

A line of credit, also known as a home equity loan, is a type of mortgage that allows you to borrow money using the equity in your property.

Equity is the value of your property, less any outstanding debt against it. For example, if you have a $500,000 property and a $300,000 mortgage against the property, then you have $200,000 equity. This is the portion of the property that you actually own.

This type of loan is a flexible mortgage that allows you to draw on funds when you need them, similar to a credit card.

What is a bad credit home loan?

A bad credit home loan is a mortgage for people with a low credit score. Lenders regard bad credit borrowers as riskier than ‘vanilla’ borrowers, so they tend to charge higher interest rates for bad credit home loans.

If you want a bad credit home loan, you’re more likely to get approved by a small non-bank lender than by a big four bank or another mainstream lender.

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

When do mortgage payments start after settlement?

Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.

Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.

Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.

Cash or mortgage – which is more suitable to buy an investment property?

Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.

Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

How long can you fix a home loan rate for?

Most lenders should let you fix your interest rate for anywhere between one and five years. While rare, a few lenders may offer fixed rate terms for as long as 10 years.

Fixing your home loan interest rate for a longer term can keep your budgeting fairly straightforward, as you shouldn't have to factor in changes to your mortgage repayments if variable rates change, such as when the Reserve Bank of Australia (RBA) changes its rates at its monthly meeting. Additionally, if variable rates rise during your fixed rate term, you can continue to pay the lower fixed rate until the fixed term ends, potentially saving you some money.

Of course, a longer fixed term also means a longer length of time where you may have less flexibility in your home loan repayments. It’s also a longer period where you won’t be able to refinance your mortgage without paying break fees. If variable rates were to fall during this period, you may also be stuck paying a higher fixed rate for a longer period.

Can you borrow the deposit for a home loan?

Most lenders will want the majority of your home loan deposit to be made up of ‘genuine savings’ which is income earned from your job. While a small number of lenders may let you use a personal loan or a credit card to help cover the cost of your deposit, this may potentially cost you more in interest, and put your finances at higher risk.

If you haven’t saved a full deposit, it may be possible to effectively borrow the deposit for a mortgage with the help of a guarantor. This is usually a parent of other family member who guarantees your mortgage with the equity in their own property.

It may also be possible to borrow the money for a home loan deposit from a family member (e.g. the Bank of Mum & Dad) or a friend, provided you draw up a formal legal agreement to pay this money back, showing your mortgage lender that you’re taking responsibility.

How fast can you get a home equity loan?

Completing an application for a home equity loan may only take 20 to 30 minutes. It may take a lender anywhere from a day to a few weeks to process and approve your application. This may be affected by your financial situation, your level of equity, and whether or not your lender needs to organise an in-persona valuation of the property.

 Before you can apply for a home equity loan, you’ll need to build up some equity in your property. The more money you can put towards extra repayments to reduce your home loan principal, the faster you can increase your equity. Also, if property values in your area increase, this may help deliver an instant equity increase once your property has been valued.

Can I get pre-approval for a home loan from BCU?

BCU offers home loan applicants a pre-approval that is valid for up to three months. To get the pre-approval, you’ll first need to provide information about your homebuying budget and whether you intend to occupy the home, through an online application form. 

A specialist will then discuss your application with you and confirm that you’ve submitted all necessary documents. 

If you meet BCU’s criteria, you could get the conditional approval within 2-3 days of this discussion. 

Remember to get written confirmation of the pre-approval. You can then go back to the bank once you’ve selected the home you want to buy to get the final approval. 

Does UBank offer home loan pre-approvals?

If you’re applying for a home loan with UBank, you can first get an approval in principle. You’ll need to provide information about your job and earnings, your household expenses, the assets you own and the debts you owe. 

UBank will assign a home loan specialist to discuss these details over a phone call, which can take about 30 minutes. 

The bank will then confirm if you’ve received in-principle approval for your home loan. Depending on how you submit your documents, this could take a few days or a few weeks. If successful, the approval will be valid for 60 days. 

How do you calculate how much you could save with a lower rate?

To work out how much you could save, we run the home loan details you’ve provided through our database, and search for similar home loan options that we think would be suitable for you.

We then calculate the costs of these loan options over 15 years (to keep our calculations consistent) and compare them to the cost calculations for your current home loan.

What happens if I don’t know my monthly repayments?

Your repayments should appear on your bank statements or your internet banking. If you make weekly or fortnightly repayments, make sure you convert them to monthly calculations.

How do you determine which home loan rates/products I’m shown?

When you check your home loan rate, you’ll supply some basic information about your current loan, including the amount owing on your mortgage and your current interest rate.

We’ll compare this information to the home loan options in the RateCity database and show you which home loan products you may be eligible to apply for.

 

Can I take a personal loan after a home loan?

Are you struggling to pay the deposit for your dream home? A personal loan can help you pay the deposit. The question that may arise in your mind is can I take a home loan after a personal loan, or can you take a personal loan at the same time as a home loan, as it is. The answer is that, yes, provided you can meet the general eligibility criteria for both a personal loan and a home loan, your application should be approved. Those eligibility criteria may include:

  • Higher-income to show repayment capability for both the loans
  • Clear credit history with no delays in bill payments or defaults on debts
  • Zero or minimal current outstanding debt
  • Some amount of savings
  • Proven rent history will be positively perceived by the lenders

A personal loan after or during a home loan may impact serviceability, however, as the numbers can seriously add up. Every loan you avail of increases your monthly installments and the amount you use to repay the personal loan will be considered to lower the money available for the repayment of your home loan.

As to whether you can get a personal loan after your home loan, the answer is a very likely "yes", though it does come with a caveat: as long as you can show sufficient income to repay both the loans on time, you should be able to get that personal loan approved. A personal loan can also help to improve your credit score showing financial discipline and responsibility, which may benefit you with more favorable terms for your home loan.

How much deposit do I need for a home loan from ANZ?

Like other mortgage lenders, ANZ often prefers a home loan deposit of 20 per cent or more of the property value when you’re applying for a home loan. It may be possible to get a home loan with a smaller deposit of 10 per cent or even 5 per cent, but there are a few reasons to consider saving a larger deposit if possible:

  • A larger deposit tells a lender that you’re a great saver, which could help increase the chances of your home loan application getting approved.
  • The more money you pay as a deposit, the less you’ll have to borrow in your home loan. This could mean paying off your loan sooner, and being charged less total interest.
  • If your deposit is less than 20 per cent of the property value, you might incur additional costs, such as Lenders Mortgage Insurance (LMI).

Should I apply for a NAB home loan pre-approval?

Buying a new home is an exciting event in anybody’s life. Getting pre-approval means you know what you can afford so you don’t waste time looking at properties outside your budget. With a NAB Bank home loan pre-approval, you can look for your new home with confidence. The lender knows you’re serious about the purchase and also exhibits a willingness to lend you money.

Applying for a NAB home loan pre-approval is relatively straightforward. You might be asked to provide proof of employment and income, details of any savings as well as any on-going debts. NAB may also conduct a credit check on you to see if you’d be a risky borrower. If NAB offers you pre-approval after these checks, you’ll know how much money they’re willing to lend you. The NAB Bank home loan pre-approval is valid for 90 days from application, so don’t apply too early and be aware of this when looking for a property. If your pre-approval expires before you find a property you’ll need to reapply.

You can apply online for NAB home loan pre-approval, visit your nearest NAB branch, call on 13 79 79, or set up an appointment. If you choose to book an appointment, it can be done in person, via video, over a call or you can have a NAB Bank representative visit you.

 

 

 

How to apply for a home loan pre-approval from St. George?

By applying for a home loan pre-approval, you can establish how much you can afford to borrow and look for houses within that pre-approved budget. Getting home loan pre-approval from St. George is a fairly simple process that can be completed within 15 minutes. 

The first step in this process is completing a home loan application. Once that application is submitted, a home loan expert from St. George will contact you to understand your requirements and your current financial position. You could also directly contact a home loan expert at the bank by calling 13 33 30 or by visiting your nearest branch. 

Once the application has been processed, the home loan expert will ask for some basic documentation to confirm your borrowing capacity. After this, you should be issued a home loan pre-approval, subject to certain conditions. 

Based on your home loan pre-approval from St. George, you can then find a property and make an offer. Your home loan expert will arrange to have the property valued and may request for more documentation, taking your home loan application to the next step.