How do home loan top-ups work?

If you've built up equity in your home, you may be able to draw out cash using a home loan top-up.

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Topping up or increasing your home loan can help you draw out funds for large purchases at a lower interest rate than some other finance options. It can leverage the equity in your home and provide you with a single, easy-to-manage repayment rather than multiple credit accounts.

What is a home loan top-up?

A home loan top-up is an increase to your existing home loan. It allows you to borrow more by using the equity in your home, or the difference between your remaining home loan and the current value of your property.

Here's how it works:

Let's say you purchased your property for $700,000 with a 20% deposit, meaning your original home loan was $560,000. After a few years, you've paid this amount down to $480,000. Meanwhile, your property has increased in value and is now worth $800,000. You would have built up $240,000 in equity.

A home loan top-up will increase the amount of your home loan to draw on this equity. In general, lenders will only increase your home loan up to 80% of the value of your home. In the example above, that means your home loan would increase from $480,000 to $640,000, giving you $160,000 to draw out in cash.

The money you access through a home loan top-up can be used for any purpose. You could use it as a deposit for an investment property, to buy a car, to pay off debt or to do non-structural renovations (structural renovations usually require a construction loan). You'll only be charged interest on the amount you use.

Keep in mind that increasing your home loan can increase your repayments and the amount of time it takes to pay off your mortgage. This means you'll be paying more interest in the long term.

How do I get a home loan top-up?

  1. You need to determine if your home loan is eligible for a top-up. Many fixed rate home loans don't allow increases. Speak to your lender to determine if you're eligible.
  2. Then your lender will assess your serviceability, or your ability to meet the larger repayments. They'll also perform a valuation on your home to determine its current value. This will determine your current loan-to-value ratio (LVR).
  3. You'll likely have to go through an application process to increase your home loan, even though the loan account will remain the same. Some lenders charge an establishment fee for home loan top-ups, so be sure to ask your lender about any fees involved.
  4. If you apply and are approved, you'll be given access to the additional funds through a redraw facility which allows you to withdraw the extra cash as you need it. You may even have the option of using a split facility to place the extra funds in a separate loan account so you can better keep track of the new debt.

What are the benefits?

Using a home loan top-up can be a more efficient way to finance purchases than applying for a personal loan, car loan or credit card. Home loans have lower interest rates than most other finance options. Moreover, a home loan top-up will keep all your debt in one account with one repayment, which can make it much easier to manage. Finally, as mentioned above, you'll only be charged interest on the funds you choose to use.

What are the risks?

Increasing your home loan amount means you'll also be increasing your monthly repayments. You'll need to reassess your budget to make sure you can manage the new repayment amount.

Increasing your mortgage can also lengthen your loan term. By taking longer to repay your home loan, you'll be increasing the amount of interest you pay.

And, while the majority of home loans carry lower interest rates than car loans or personal loans, carrying the debt over a longer term means you'll end up paying more in interest. It's wise to try to pay down the extra debt as quickly as possible.

What are the alternatives to a home loan top-up?

The alternatives to a home loan top-up will depend on what you're using the funds for. You could:

  • Apply for a personal loan or car loan instead. While these carry higher interest rates, they also come with shorter loan terms, meaning you'll pay less in interest overall.
  • Consider a line of credit or home equity loan. This functions much like a home loan increase, giving you access to funds based on the equity in your home. A line of credit differs in that it's a separate loan account, requiring a separate repayment.
  • Depending on the size of your purchase you could also apply for a credit card. However, credit cards generally carry very high interest rates relative to home loans, and, depending on your credit limit, may offer a lower amount of funds for your purchase. If you choose to use a credit card for a major purchase, you'll need to ensure you're disciplined to pay it off as quickly as possible.

If a home loan top-up isn't right for you, consider switching to a new lender to get a better deal

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Data indicated here is updated regularly
$
% p.a.
years
Name Product Interest Rate (p.a.) Comp. Rate^ Application Fee Ongoing Fees Maximum Insured LVR Amount Saved
St.George Basic Home Loan
2.54%
2.56%
$0
$0 p.a.
80%
$43,171.24
Up to $4,000 refinance cashback. With this competitive variable rate loan from St.George, refinancers borrowing $250,000+ can get up $4,000 cashback and borrow up to 80% of the property's value. (Terms, conditions & exclusions apply).
Westpac Flexi First Option Home Loan
2.29%
2.72%
$0
$8 p.a.
95%
$50,287.27
Up to $3,000 refinance cashback.
A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.
Suncorp Back to Basics Home Loan
2.54%
2.55%
$0
$0 p.a.
80%
$43,314.23
A competitive variable interest rate loan with low fees. The establishment fee is waived if you borrow $150,000 or more.
Athena Variable Home  Loan
2.19%
2.19%
$0
$0 p.a.
60%
$53,040.06
Owner occupiers with 40% deposits or equity can get this competitive variable rate loan. No upfront or ongoing fees.
HSBC Fixed Rate Home Loan
1.88%
2.98%
$0
$0 p.a.
80%
$61,434.54
Lock in a competitive fixed rate for 2 years and buy your home with a 20% deposit.
Suncorp Home Package Plus Fixed
1.89%
2.94%
$0
$0 p.a.
80%
$61,167.02
Lock in a low fixed rate loan for two years and get the annual package fee waived in the first year. Available for borrowers with 20% deposits.
UBank UHomeLoan Variable Rate
2.34%
2.34%
$0
$0 p.a.
80%
$48,903.84
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
Macquarie Bank Basic Home Loan
2.49%
2.49%
$0
$0 p.a.
60%
$44,719.6
A competitive variable rate home loan for owner-occupiers. Requires a 40% deposit.
St.George Fixed Rate Advantage Package
2.09%
3.46%
$0
$395 p.a.
95%
$55,020.05
Lock in a low fixed rate for the first two years. Refinancers borrowing $250,000 or more can get cashbacks between $2,000 and $4,000 depending on their loan to value ratio (Other terms, conditions and exclusions apply
Westpac Fixed Option Home Loan Premier Advantage Package
2.09%
3.5%
$0
$395 p.a.
95%
$55,375.62
Up to $3,000 refinance cashback.
Competitive fixed rate home loan. Eligible borrowers refinancing $250,000 or more can get up to $3,000 cashback. Other conditions apply.
homeloans.com.au Low Rate Home Loan with Offset
2.14%
2.16%
$0
$0 p.a.
60%
$54,408.06
A competitive rate with no application or ongoing fee. This loan is not available for construction.
Virgin Money Reward Me Fixed Rate Home Loan
2.04%
2.79%
$300
$10 p.a.
80%
$56,525
$3,000 refinance cashback.
Buy your home and lock in a low rate for the first two years. Get a $3,000 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 30 November 2020 and settle by 23 April 2021.
HSBC Home Value Loan
2.59%
2.6%
$0
$0 p.a.
80%
$41,903.57
Get a low interest rate loan with no ongoing fees. Plus you can make extra repayments and free redraw online.
homeloans.com.au Low Rate Home Loan with Offset
2.24%
2.26%
$0
$0 p.a.
90%
$51,666.66
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments. This loan is not available for construction.
St.George Basic Home Loan
2.59%
2.61%
$0
$0 p.a.
90%
$41,759.64
Up to $4,000 refinance cashback.
With this competitive variable rate loan from St.George, refinancers borrowing $250,000+ can get up $4,000 cashback and borrow up to 90% of the property's value. (Terms, conditions & exclusions apply).
Macquarie Bank Basic Fixed Home Loan
2.19%
2.53%
$0
$0 p.a.
80%
$53,040.06
Borrow up to $750,000 with this basic 3 years fixed rate home loan.
Athena Variable Home  Loan
2.54%
2.54%
$0
$0 p.a.
60%
$43,314.23
Investors with large 40% deposits or equity can get this low variable rate. A competitive option for investors looking to refinance.
Bank of Melbourne Basic Home Loan
2.54%
2.56%
$0
$0 p.a.
80%
$43,171.24
Up to $4,000 refinance cashback
A competitive variable rate loan from Bank of Melbourne. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).
homeloans.com.au Low Rate Home Loan with Offset
2.39%
2.41%
$0
$0 p.a.
80%
$47,514.42
This investment loan keeps fees low, has a sharp interest rate and comes with a 100% offset account. This loan is not available for construction.
Athena Variable Home  Loan
2.24%
2.21%
$0
$0 p.a.
70%
$51,666.66
A low variable rate for owner occupiers with 30% deposits. No upfront or ongoing fees.
UBank UHomeLoan Fixed
2.14%
2.35%
$0
$0 p.a.
80%
$54,408.06
Fix your mortgage for 1 year with a very competitive rate and no ongoing fees.
Bank of Melbourne Advantage Package Fixed Home Loan
2.09%
3.46%
$0
$395 p.a.
95%
$55,240.95
Competitive fixed rate loan. Refinancers borrowing $250,000 or more can get cashbacks between $2,000 and $4,000 depending on their loan to value ratio (Other terms, conditions and exclusions apply
BankSA Basic Home Loan
2.54%
2.56%
$0
$0 p.a.
80%
$43,171.24
Up to $4,000 refinance cashback
A competitive variable rate loan from BankSA. Refinancers borrowing $200,000 or more can get a $4,000 cashback (Other terms, conditions and exclusions apply).
homeloans.com.au Low Rate Home Loan with Offset
2.59%
2.61%
$0
$0 p.a.
90%
$41,903.57
Save on interest with a free 100% offset account and buy your property with just a 10% deposit. This loan is not available for construction.
Bank of Melbourne Basic Home Loan
2.59%
2.61%
$0
$0 p.a.
80%
$41,523.59
Competitive variable rate home loan. Refinancers borrowing $250,000 or more can get cashbacks between $2,000 and $4,000 depending on their loan to value ratio (Other terms, conditions and exclusions apply
BankSA Advantage Package Fixed Home Loan
2.09%
3.46%
$0
$395 p.a.
80%
$55,020.05
Competitive fixed rate loan. Refinancers borrowing $200,000 or more can get cashbacks between $2,000 and $4,000 depending on their loan to value ratio (Other terms, conditions and exclusions apply
UBank UHomeLoan Fixed
1.95%
2.27%
$0
$0 p.a.
80%
$59,557.21
A competitive fixed interest rate loan with no ongoing fees. Requires a 20% deposit.
Athena Variable Home  Loan
2.29%
2.23%
$0
$0 p.a.
80%
$50,287.93
A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.
CUA Achieve Variable Home Loan
2.55%
2.6%
$600
$0 p.a.
95%
$41,836.97
Home buyers can get a competitive, low-fee variable rate plus a 100% offset account. Low deposit option available. Eligible new home buyers with low deposits can apply for the First Home Loan Deposit Scheme with this lender and avoid LMI costs.Eligible refinancers can get a $2,000 pre-paid credit card when they switch to CUA.
Virgin Money Reward Me Variable Home Loan
2.59%
2.76%
$300
$10 p.a.
60%
$41,255.02
$3,000 refinance cashback.
A variable rate loan for owner occupiers with a 40% deposit (or equity) borrowing under $500,000. Get a $3,000 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 30 November 2020 and settle by 23 April 2021.
Greater Bank Great Rate Discount Variable with Family Pledge Home Loan
2.59%
2.6%
$0
$0 p.a.
110%
$41,903.57
Pay no deposit or LMI and get a discounted rate with this family pledge loan. Requires a family member to act as guarantor. NSW, QLD and ACT only.
Virgin Money Reward Me Variable Home Loan
2.5%
2.67%
$300
$10 p.a.
60%
$43,798.03
$3,000 refinance cashback.
Buy your home and lock in a low rate for the first two years. Get a $3,000 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 30 November 2020 and settle by 23 April 2021.
UBank UHomeLoan Fixed
2.29%
2.72%
$0
$0 p.a.
80%
$50,287.93
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
Athena Variable Home  Loan
2.84%
2.46%
$0
$0 p.a.
80%
$34,771.25
Owner occupiers can refinance to one of the most competitive interest-only rates in the market. No application fee and no ongoing fees.
UBank UHomeLoan Fixed
2.29%
2.36%
$0
$0 p.a.
80%
$50,287.93
A one year fixed rate offer with no ongoing bank fees.
Heritage Bank Fixed Rate Home Loan
2.19%
4.23%
$600
$8 p.a.
95%
$52,015.55
Get a partial offset account and the option to make interest-only repayments.
UBank UHomeLoan Fixed
2.44%
2.74%
$0
$0 p.a.
80%
$46,119.67
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
Heritage Bank Discount Variable Home Loan
2.68%
2.73%
$600
$0 p.a.
80%
$38,258.78
Family guarantee option available. Enjoy flexible repayments and a low minimum loan amount.
HSBC Home Value Loan
2.64%
2.65%
$0
$0 p.a.
90%
$40,487.62
A competitive value home loan with no ongoing fee.
Heritage Bank Advantage Package Fixed
2.39%
3.23%
$0
$350 p.a.
95%
$46,954.14
Get a partial offset account and flexible repayments with this package loan.
UBank UHomeLoan Fixed
2.29%
2.35%
$0
$0 p.a.
80%
$50,287.93
A competitive 3 year fixed rate with no ongoing bank fees.
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Logo for Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)

Up to $3,000 refinance cashback. A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.

Logo for St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)

Up to $4,000 refinance cashback. With this competitive variable rate loan from St.George, refinancers borrowing $250,000+ can get up $4,000 cashback and borrow up to 90% of the property's value. (Terms, conditions & exclusions apply).

Logo for Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I

A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.

Logo for Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)

Get a competitive variable interest rate with no application fee or ongoing fees.

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