Compare line of credit home loans

If you have equity in your property you can borrow it using a line of credit loan and spend it on renovations, travel, investments or anything you want.

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Line of Credit Loan

State Custodians Low Rate LOC - LVR up to 80% (Owner Occupier, IO)

3.15 % p.a.

variable rate

3.16 % p.a.

comparison rate

Line of Credit Loan

Use the State Custodiansw Low Rate LOC - LVR up to 80% (Owner Occupier, IO) to gain access to your equity with a low interest rate line of credit home loan plus no application fee and no ongoing fee.

  • Interest rate of 3.15% p.a.
  • Comparison rate of 3.16% p.a.
  • Application fee of $0
  • Maximum LVR: 80%
  • Minimum borrowing: $100,000
  • Max borrowing: $2,000,000
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Compare line of credit rates for December 2019

Rates last updated December 12th, 2019
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Loan purpose
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Loan type
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
State Custodians Low Rate LOC - LVR up to 80% (Owner Occupier, IO)
3.15%
3.16%
$0
$0 p.a.
80%
A low-fee line of credit loan from an online lender. Unlock the equity in your home and make interest-only repayments with a competitive rate.
AMP Professional Package Line of Credit - $750,000 and above (Owner Occupier, IO)
3.74%
$0
$349 p.a.
80%
Low fee line of credit loan with package benefits.
Aussie Select Line of Credit - (LVR 80.01% to 90%) (Owner Occupier)
3.94%
$0
$15 monthly ($180 p.a.)
90%
A low rate line of credit with low ongoing fee.
State Custodians Low Rate LOC - LVR up to 70% (Owner Occupier, IO)
3.08%
3.10%
$0
$0 p.a.
70%
Withdraw up to 70% of your home equity with this competitive line of credit loan.
P&N Bank Equity Access Home Loan
5.12%
$395
$10 monthly ($120 p.a.)
90%
A home loan which gives flexible access to your equity.
ANZ Equity Manager - Breakfree Home Loan Package $700,000 plus
5.71%
$0
$395 p.a.
80%
A low interest rate home loan with a low ongoing fee.
Westpac Equity Access
6.21%
$600
$10 monthly ($120 p.a.)
95%
Tap into your equity with a line of credit home loan from Westpac.
ANZ Equity Manager - Variable
6.41%
$600
$150 p.a.
80%
Access your equity with a low variable rate and low fees.
State Custodians Low Rate LOC - LVR up to 80% (Investor, IO)
3.40%
3.41%
$0
$0 p.a.
80%
Investors can easily access their equity using BPAY, a debit Master Card or cheque book with this interest-only line of credit.

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Start your home loan application with expert help from Aussie.

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Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2019 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

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What is a line of credit and how can I use it?

  • A line of credit, or a home equity loan, allows you to borrow money using the equity in your property.
  • Equity is the value of your home minus any money you owe on it. If your home is worth $500,000 and you owe $200,000 on your mortgage, then your equity is $300,000.

You can take out a line of credit and spend it over time on anything, from home renovations to a holiday to a car, or even to fund another property purchase.
Home equity explained

How much of my equity can I borrow?

Most lenders will lend you up to 80% of your property's value, but some will go up to 90% or even 95%.

Interest rate calculation

You only need to repay the amount you actually spend, not the total line of credit that the lender extends to you.

If you had a $120,000 line of credit and you spent $30,000 on a car, you would only pay interest on the $30,000.

How to use a line of credit loan to invest

Investors can buy an investment property by borrowing equity in an existing property. For example, if your property is worth $400,000 and you've taken out a mortgage of $250,000, then you have $150,000 worth of equity. This is a substantial amount of money that can be used to fund the purchase of another property if you're looking to diversify your portfolio.

How much does a line of credit home loan cost?

Here's a breakdown of the potential costs of a line of credit loan.

  • Interest charges. The lender charges interest only on what you borrow.
  • Upfront fees. Many lenders charge an application fee. A valuation fee is quite common too. You may also have to pay a discharge fee when the loan ends.
  • Ongoing fees. Some lenders charge a small monthly service fee instead of, or sometimes in addition to, the application fee.

Repayments

With many line of credit home loans, you don't have to make monthly or regular repayments. This gives you more flexibility. In many cases, you don't have to make repayments until you reach your credit limit.

Line of credit home loans are often interest only for the first few years, meaning you pay the interest charges now and repay the borrowed amount later.

This keeps your costs down, but if you continue doing this for a long time it could cost you a lot in interest.

Benefits and drawbacks of borrowing home equity

There are many benefits to withdrawing your equity if you need it. But any borrowing situation comes with risks that you need to know.

Benefits

  • Accessible. Line of credit loans are easier to obtain than other types of loans and credit cards.
  • Flexibility. The funds can be withdrawn easily via cheque or an ATM card linked to the loan. Some lenders provide borrowers with the ability to withdraw funds through an online banking system or a telephone banking system.
  • Additional repayments. Extra repayments on the loan can be made at any time, which can help reduce the amount of interest paid over the life of the loan.
  • Low interest rates. One of the most attractive benefits of a line of credit loan is that it often has lower interest rates compared to other products such as personal loans or credit cards.

Drawbacks

  • Difficult to manage. As it's easy to access the money, and most line of credit loans involve a large amount of money, the borrower needs to be financially disciplined to manage this type of loan.
  • Security. If the loan isn't repaid according to the terms of the contract, the lender can take the property as payment.
  • Equity loss. Your equity is wealth. It's yours to use as you see fit, but keep in mind that by using it, you're reducing – hopefully temporarily – the value you have in your house.
  • No end date. The flexibility of a line of credit can be a bad thing too. If you take a long time to repay what you've borrowed it could get expensive.

How to compare and apply

Comparing home equity loans is a little different to comparing traditional mortgages. You need to look at:

  • Interest rate. The lower your rate the lower your repayments.
  • Fees. The fewer the fees, the better.
  • Borrowing amount. The amount you wish to borrow is an important consideration. Some lenders have fairly low maximum loan amounts, while others could lend you enormous sums of money (provided that you have the equity).

How do I apply for a line of credit equity loan?

If you're applying for a line of credit you may need to satisfy the following criteria or supply the following information:

  • Name and address for each borrower
  • Purchase date and price of your home
  • Employment income
  • Outstanding balance and monthly payment on current mortgage
  • Estimated market value of your home
  • Requested loan amount
  • Photo ID for all borrowers

More line of credit questions

How can I minimise the interest I have to pay?

You can save money on the interest payable over the life of your loan by using your income to offset the loan amount. This can be done by depositing your income into the loan account and then withdrawing money as needed to satisfy your living expenses from the line of credit. With this method, the interest on the loan is only calculated on the remaining balance of the account, which will lower your interest charges.

How can I protect my home?

From a lender's point of view, they have the security of your home in the event that you default on the loan. If your property depreciates in value, you will end up with less equity and you could even end up owing more on the loan than your home is actually worth. This is why it's a good idea not to borrow or use the full amount of equity available. Always leave a buffer.

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

Line of credit loans typically have much lower interest rates than personal loans. If you're disciplined in paying off your line of credit, you could potentially save thousands of dollars in interest. Let's look at an example.

Line of credit Personal loan
Borrowing amount $10,000 $10,000
Length 5 years 5 years
Rate 5% 14%
Monthly repayment $188.71 $235

Over the course of the personal loan, you would pay $4,117 in interest. With a line of credit rate, you'd pay $1,322.74 in interest. That's a saving of more than $2,794 over five years.

However, this requires the discipline to repay your line of credit loan in a timely manner. If you ended up letting your line of credit loan stay open for 15 years, you would end up paying $4,234.29 in interest, eclipsing the amount you would have paid on a personal loan.

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

Online only cashback offer: Refinancers borrowing $250,000 or more can get a $4,000 cashback for their first application (Other terms, conditions and exclusions apply). Buyers and refinancers can get this competitive variable interest rate. Application fee waived for loans above $150,000.

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UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers, P&I Borrowing over $200,000

Take advantage of a low-fee mortgage with a special interest rate of just 2.84% p.a. and a 2.84% p.a. comparison rate.

Logo for Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR<=90% Incl. LMI (Owner Occupier, P&I)
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR<=90% Incl. LMI (Owner Occupier, P&I)

Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000.

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23 Responses

  1. Default Gravatar
    ChrisApril 11, 2018

    I own my house that

    We own our house and want to take out a line of credit for 100k and our house is valued at 850k
    I am a sole operator of a small business that only turns over around 20-30k, my question is if my low income isn’t enough to meet the application credentials can I use a guarantor for this type of loan?
    Regards
    Chris.

    • Avatarfinder Customer Care
      JoshuaApril 12, 2018Staff

      Hi Chris,

      Thanks for getting in touch with finder.

      The answer to your question is yes. It is possible to use a guarantor for a line of credit loan. However, it would still depend on your chosen lender whether they accept such arrangements or not. Your house is already a good collateral for your loan and so, lenders might still consider your application even if you don’t have a guarantor. But of course, having a guarantor can increase of approval especially if the guarantor has a good credit score and financial standing.

      For this reason, I highly recommend that you get in touch with your chosen lender and determine whether they accept a guarantor or not.

      If you want to know more about guarantor personal loans, please click this link.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

  2. Default Gravatar
    RavApril 6, 2017

    Hi

    My home is valued at approx. $650K
    I currently have around $30K to pay off
    I have a current like of current of $59K
    I am looking to purchase a investment property
    I am employed full time
    How much can I borrow

    • Avatarfinder Customer Care
      HaroldApril 7, 2017Staff

      Hi Rav,

      Thank you for your inquiry.

      It woul be nice getting in touch with a licensed mortgage broker so that you can review your borrowing capacity. A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that’s more inclined to review your application. On this page you can click the tab “Speak to a Mortgage Broker”.

      I hope this information has helped.

      Cheers,
      Harold

  3. Default Gravatar
    ShelleyMarch 13, 2017

    I have a 50,000 home loan / line of credit. When I was notified by the bank that the loan was switching from interest only to monthly principal + interest and this would equal 440 / month, I paid 48,500 dollars off the loan in order to reduce my principal. The bank has continued to charge me 440 per month, vent though my loan balance is now $1500. Is this legal? They say that I have the ability to use the 48,500, so I need to pay $440 a month for this privilege. What?

    • Avatarfinder Customer Care
      HaroldMay 5, 2017Staff

      Hi Shelley,

      Thank you for your inquiry.

      With your current situation you would need to read your loan docs or get a financial advisor/accountant or mortgage broker to read them to help understand how the bank is able to do this.

      I hope this information has helped.

      Cheers,
      Harold

  4. Default Gravatar
    roslynMay 20, 2016

    My home is worth $3 million. I want a line of credit of $900,000 to buy a property. I own my home how do I do this and how much are repayments?

    • Avatarfinder Customer Care
      MarcMay 23, 2016Staff

      Hi Roslyn,
      thanks for the question.

      You can compare and apply for line of credit loans using this table. Click the green ‘go to site’ buttons to be taken to the lender’s site to discuss your options and start the process. Alternatively you can start speak to a mortgage broker by clicking the ‘Speak to a mortgage broker’ tab and filling out the form.

      Your repayments will depend on how much you withdraw and how you choose to use it.

      You can use our calculator to get an idea of what your repayments would be.

      I hope this helps,
      Marc.

  5. Default Gravatar
    IvanaApril 27, 2016

    Hi
    I was looking at getting line of credit against my home.
    I own my own home , value about $850,000 and I have no mortgage
    I don’t have any debt, I have substantial money saved , I have full time job.
    I am looking at buying some investment property , when I contacted one of the lenders, I was only given $300,000
    I thought I was able to get more like the 80% value of my home.

    • Avatarfinder Customer Care
      BelindaApril 28, 2016Staff

      Hi Ivana,

      Thanks for reaching out.

      If you’d like to understand your borrowing capacity, you can use our calculator which takes into account your income, liabilities and the number of dependents that you have. Keep in mind that lenders have different eligibility criteria for different loans and this criteria can be more stringent for line of credit (LOC) and investment loans (particularly after APRA’s intervention).

      I recommend getting in touch with a licensed mortgage broker so that you can review your borrowing capacity and your propensity to repay a loan. A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that’s more inclined to review your application.

      All the best,
      Belinda

  6. Default Gravatar
    RobApril 19, 2016

    Hi I am on a carer pension and my husband is on aged pension. We own our home outright, of low value due to situation approx $80-100k and have $40k+ savings.
    We need some renovations a new bathroon toilet built on as the current one is not suitable etc not sure ob costs but say $40000.
    Is a LOC the way to look for finance?

    • Avatarfinder Customer Care
      BelindaApril 20, 2016Staff

      Hi Rob,

      Thanks for reaching out.

      As finder.com.au is an online comparison website we are not licensed to give you personal advice regarding the type of finance that you should apply for. However, if you need to fund a renovation project, then a line of credit home loan or a personal loan may be feasible.

      You can compare a range of line of credit or home equity loans above on this page, and you can compare personal loans on this page.

      Keep in mind that with a line of credit loan, you generally need to have good financial discipline to ensure that you won’t access a large amount of funds at one given time.

      It’s advised that you speak to a broker to discuss your borrowing options and the type of finance that will suit your situation. A broker can review your borrowing power and they can draw upon a panel of lenders to find one that’s more likely to review your application (given that you are both receiving pension benefits).

      All the best,
      Belinda

  7. Default Gravatar
    JohnFebruary 11, 2015

    I’m currently semi retired, working part time and together with my allocated pensions and annuities my annual income is approx $60,000. I own my home which has a market value of #850,000. All credit cards both bank and store are paid in full each month. We own two cars. We currently have a Line of credit with the NAB which has a ceiling of $30,000.The LOC debt outstanding is approx $7500. The interest rate is 5.36%. We have no other debts. I’m seeking to increase the LOC ceiling to $50,000 and improve on the 5.36% interest rate. What advice can you offer?

    • Avatarfinder Customer Care
      ShirleyFebruary 12, 2015Staff

      Hi John,

      Thanks for your question.

      There are number of products on this page that is under the 5.36% p.a. mark. If you click on interest rate (p.a.) in the blue comparison table above, it will automatically sort the products into ascending order for you.

      If you’d like to proceed with the new loan, you can speak to your new lender about what options you have paying out your current LOC.

      I hope this helps,
      Shirley

  8. Default Gravatar
    gregFebruary 1, 2015

    I’m looking at a 120,000 line of credit, have no mortage, house value 1.2Mil. I will draw down small amounts Buy car , hol etc, extra money into super over a 2 year period. We plan to sell the house 2018 pay off the Line of credit. I know you pay for what you use (interest) how does the lender determine what the Monhtly re-payments will be ???

    • Avatarfinder Customer Care
      ShirleyFebruary 2, 2015Staff

      Hi Greg,

      Thanks for your question.

      The monthly repayments are usually determined by the interest rate, applied to the outstanding balance. You can enter your borrowing amount into our blue table above, and it will generate the monthly repayments for you.

      Cheers,
      Shirley

  9. Default Gravatar
    sue-anneJanuary 20, 2015

    my husband has a line of credit it is attached to an investment property, what happens if he dies, does it automatically come to me or does the line of credit become a mortgage?

    • Avatarfinder Customer Care
      ShirleyJanuary 21, 2015Staff

      Hi Sue,

      Thanks for your question.

      We have a good article called ‘what happens to my home loan if i die?’ that can provide more information on this topic. Generally the debt is handed over to the person is closest to the borrower. As the article explains, there are some measures that you can take.

      Hope this helps,
      Shirley

    • Avatarfinder Customer Care
      MarcJanuary 21, 2015Staff

      Hi Sue-anne,
      thanks for the question.

      We interviewed an expert from Slater & Gordon about this and wrote a guide about it.

      I hope this helps,
      Marc.

  10. Default Gravatar
    JustineSeptember 26, 2014

    I have about $280 000 equity in my home and I would like to apply for a line of credit. I have no other loans apart from my mortgage and I have few expenses (only storage and health insurance). I don’t own a care and I have no dependents. I applied for a loan of $5000 from the bank with which I have my mortgage but they refused. The reason is that I am currently unemployed at the moment, but I have signed a contract to start a well paying job in December this year.

    My question is: Can I apply at another bank even if I don’t have a bank account with them? I don’t even have a credit card because I am financially conservative, but when I applied for one at a different bank to my mortgage bank, I was refused again, because I am currently unemployed. If I can’t manage to get an equity line of credit from a bank, what are other options for me to get $5000 in the next month or so? I would really appreciate your advice.

    • Avatarfinder Customer Care
      ShirleySeptember 29, 2014Staff

      Hi Justine,

      Thanks for your question.

      Currently being unemployed is a huge roadblock for any type of credit application, because most lenders like to see that you’re earning an income to pay back the loan you take out. Even though you intend to tap into your equity, lenders like to see that there is a supplementary income to reduce the risk exposed to them.

      If you’d still like a line of credit home loan, you may want to get in touch with a mortgage broker. They’re home loan experts who can help you find the right loan for your situation.

      Hope this helps,
      Shirley

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