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™

2.23

/ 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™

2.23

/ 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™

1.99

/ 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™

1.99

/ 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
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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
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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
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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
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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™

3.16

/ 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™

3.16

/ 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™

2.93

/ 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™

2.93

/ 5
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More details
Advertised Rate

3.90

% p.a

Variable

Comparison Rate*

4.31

% p.a

Company
Repayment

$975

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.74

/ 5
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More details
Advertised Rate

4.17

% p.a

Variable

Comparison Rate*

4.35

% p.a

Company
Repayment

$1,043

monthly

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

1.55

/ 5
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More details
Advertised Rate

4.37

% p.a

Variable

Comparison Rate*

4.55

% p.a

Company
Repayment

$1,093

monthly

Features
Redraw facility
Offset Account
Borrow up to 95%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.55

/ 5
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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 79.9999%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.90

/ 5
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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
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More details
Advertised Rate

4.51

% p.a

Variable

Comparison Rate*

4.91

% p.a

Company
Repayment

$1,128

monthly

Features
Redraw facility
Offset Account
Borrow up to 94.9999%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.65

/ 5
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More details
Advertised Rate

4.95

% p.a

Variable

Comparison Rate*

5.11

% p.a

Company
Repayment

$1,745

monthly

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

1.78

/ 5
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More details
Advertised Rate

5.52

% p.a

Variable

Comparison Rate*

5.68

% p.a

Company
Repayment

$1,380

monthly

Features
Redraw facility
Offset Account
Borrow up to 90%
Extra Repayments
Interest Only
Owner Occupied
Real Time Rating™

1.59

/ 5
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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 is a credit file?

A comprehensive summary of your credit history from an authorised credit reporting agency.

It includes your credit details, credit taken in the last five years, any default payments or credit infringements, arrears, repayment history, bankruptcy filings and a list of credit applications (including unapproved credit applications) in addition to your personal details.

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.

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 is interest charged on a reverse mortgage from IMB Bank?

An IMB Bank reverse mortgage allows you to borrow against your home equity. You can draw down the loan amount as a lump sum, regular income stream, line of credit or a combination. The interest can either be fixed or variable. To understand the current rates, you can check the lender’s website.

No repayments are required as long as you live in the home. If you sell it or move to a senior living facility, the loan must be repaid in full. In some cases, this can also happen after you have died. Generally, the interest rates for reverse mortgages are higher than regular mortgage loans.

The interest is added to the loan amount and it is compounded. It means you’ll pay interest on the interest you accrue. Therefore, the longer you have the loan, the higher is the interest and the amount you’ll have to repay.

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.

What do people do with a Macquarie Bank reverse?

There are a number of ways people use a Macquarie Bank reverse mortgage. Below are some reasons borrowers tend to release their home’s equity via a reverse mortgage:

  • To top up superannuation or pension income to pay for monthly bills;
  • To consolidate and repay high-interest debt like credit cards or personal loans;
  • To fund renovations, repairs or upgrades to their home
  • To help your children or grandkids through financial difficulties. 

While there are no limitations on how you can use a Macquarie reverse mortgage loan, a reverse mortgage is not right for all borrowers. Reverse mortgages compound the interest, which means you end up paying interest on your interest. They can also affect your entitlement to things like the pension It’s important to think carefully, read up and speak with your family before you apply for a reverse mortgage.

How to use the ME Bank reverse mortgage calculator?

You can access the equity in your home to help you fund your needs during your senior years. A ME Bank reverse mortgage allows you to tap into the equity you’ve built up in your home while you continue living in your house. You can also use the funds to pay for your move to a retirement home and repay the loan when you sell the property.

Generally, if you’re 60 years old, you can borrow up to 15 per cent of the property value. If you are older than 75 years, the amount you can access increases to up to 30 per cent. You can use a reverse mortgage calculator to know how much you can borrow.

To take out a ME Bank reverse mortgage, you’ll need to provide information like your age, type of property – house or an apartment, postcode, and the estimated market value of the property. The loan to value ratio (LVR) is calculated based on your age and the property’s value.

Am I guaranteed to be approved for all the loans I’m shown?

No. While we will do our best to show a list of loans that may suit your needs, if you choose to apply to refinance, it is up to the lender to approve or disapprove your loan based on your individual circumstances, after you have submitted all your paperwork.

This can sometimes take up to 30 days, so it is important to find out exactly what the criteria is for the loan, and what you need in terms of paperwork. RateCity does not make any suggestions taking into account your personal and individual needs.

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.

 

Does the Home Loan Rate Promise apply to discounted interest rate offers, such as honeymoon rates?

No. Temporary discounts to home loan interest rates will expire after a limited time, so they aren’t valid for comparing home loans as part of the Home Loan Rate Promise.

However, if your home loan has been discounted from the lender’s standard rate on a permanent basis, you can check if we can find an even lower rate that could apply to you.

How do I find out my current interest rate and how much is owing on my loan?

Your bank statements and/or your internet banking should show these details. If you are not sure, call your bank or estimate.

Who can enter?

Any Australian resident who is over 18 and currently has a personal home loan is eligible for our Home Loan Rate Promise. See terms and conditions.

How does RateCity make money?

For details on how RateCity makes money, please see here.