Refinance without equity

Switching to a new home loan is called refinancing. It's a good way to get a lower interest rate or a home loan that just works better for you. But it you don't have enough equity then refinancing is going to be quite expensive, or even impossible.

Equity, negative equity and refinancing

Your equity is how much of your home you actually own. It's the value of the property, minus any mortgage debt you still owe.

Negative equity occurs when you only own a small portion of your home and then your home loses value. This can happen during a property crash or market downturn, or if your property is damaged in some way.

Ending up with a property and a home loan with negative equity can happen for a few different reasons, including when:

• You bought your property recently, then property prices drop.
• You co-own the property and need to buy the other partner out due to relationship breakdown, but your portion of ownership leaves you with very little equity.

Here's an example of how borrowers can end up trying to refinance with no equity.

Calculate how a rate rise might affect your loan repayments

What is your repayment type?

Principal and interest

Interest only

What is your remaining loan amount?

$

What is your current interest rate?

%

How much is your rate going up by?

%

What is your loan term?

With a new interest rate of , your monthly repayments will increase by .

You could save a year based on Finder's lowest refinance interest rate of

Compare your options in under a minute.

Compare my options now

New to refinancing? Subscribe below to get tips from our home loan experts.

Get refinancing expert tips

How can you refinance without equity?

• Consider specialist lenders. If you're looking to refinance and you've only built up a small amount of equity in your home, think about refinancing to specialist lenders or building societies. These lenders may have more lenient eligibility criteria when it comes to determining your serviceability potential. If you can demonstrate that you have enough savings, income or assets to service the loan, the lender may overlook the minimal amount of equity that you have.
• Find a guarantor. With a small amount of equity in your existing home, you may want to refinance to a guarantor loan. This can boost your borrowing capacity as the guarantor essentially takes responsibility for servicing the loan if you default.
• Get an independent valuation. If you can prove that your property has increased in value, then the lender may be more inclined to let you refinance and borrow a larger amount of funds.
• Request a copy of your credit file. With a small amount of equity, you present a larger risk to the lender. This is why it may be a good idea to take measures to trim your existing debt and clean up your credit file. If you can show the lender that you make a conscious effort to meet your repayments on time and make extra repayments in the past, then they may be more likely to approve your refinance application.

Can you refinance with less than 20% equity?

While many lenders will lend you money with just a 5% deposit, you usually need at least 20% to refinance.

You could refinance with less than 20% equity, but you'd probably need to pay lenders mortgage insurance on top. This is true even if you paid lenders mortgage insurance the first time round.

Learn more about the amount of equity that you need to refinance your mortgage.

What are the alternatives to refinancing without equity?

If you're unable to refinance then you might have to simply build equity by paying off more of your mortgage.

• Make extra repayments. Easier said than done, but if you have extra cash or other assets you can sell to help reduce your mortgage then you could build enough equity to refinance your mortgage.
• Add value to your property. Renovating the property could add value, if done correctly. You need to work out what renovations will add value and how affordable those renovations are. If you have handyman skills or know someone who does this could be a good option.
• Rent it out. You could rent out a room in the property to bring in extra money to help make repayments. It might not be an ideal option, but for some people it might be worth it.

Compare 90 - 95% LVR home loans

The loans below are not 0% deposit or no equity home loans, but allow applications from borrowers with 5 - 10% deposit or equity.

1 - 11 of 11

Updated regularly

We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.

Learn how we maintain accuracy on our site.

Close

Name	Interest Rate p.a.	Comparison Rate p.a.	Fees	Monthly Payment
P&N Bank & Basic Home Loan Principal & InterestInterest only5% min. depositOwner-occupier	Interest Rate 6.59%	Comparison Rate 6.60%	Fees Application: $0 Ongoing: $0 p.a.	Monthly Payment $958	Compare
Westpac Flexi First Option Home Loan Principal & Interest5% min. depositOwner-occupier	Interest Rate 6.74%	Comparison Rate 7.06%	Fees Application: $0 Ongoing: $0 p.a.	Monthly Payment $973	More Info Compare
UniBank Your Way Fixed Home Loan Principal & Interest 1Y Fixed5% min. depositOwner-occupierOffset account	Interest Rate 6.54%	Comparison Rate 6.24%	Fees Application: $600 Ongoing: $0 p.a.	Monthly Payment $953	More Info Compare
Easy Street Smart Variable Home Loan Principal & Interest5% min. depositInvestmentOffset account	Interest Rate 6.04%	Comparison Rate 6.09%	Fees Application: $500 Ongoing: $0 p.a.	Monthly Payment $905	More Info Compare
IMB Fixed Rate Home Loan Principal & Interest 1Y Fixed5% min. depositOwner-occupier	Interest Rate 6.44%	Comparison Rate 6.42%	Fees Application: $449 Ongoing: $6 per month	Monthly Payment $944	More Info Compare
G&C Mutual Bank Momentum Home Loan Finder AwardPrincipal & Interest5% min. depositOwner-occupierOffset account	Interest Rate 6.44%	Comparison Rate 6.47%	Fees Application: $0 Ongoing: $0 p.a.	Monthly Payment $944	More Info Compare
Newcastle Permanent Building Society Fixed Rate Home Loan Principal & Interest 1Y Fixed5% min. depositOwner-occupier	Interest Rate 6.49%	Comparison Rate 8.32%	Fees Application: $595 Ongoing: $0 p.a.	Monthly Payment $948	More Info Compare	A fixed rate loan which allows extra repayments, and charges a low application fee.
IMB Fixed Rate Home Loan Principal & Interest 2Y Fixed5% min. depositOwner-occupier	Interest Rate 6.14%	Comparison Rate 6.37%	Fees Application: $449 Ongoing: $6 per month	Monthly Payment $914	More Info Compare
Heritage Bank Fixed Rate Home Loan Principal & Interest 2Y Fixed5% min. depositOwner-occupier	Interest Rate 6.29%	Comparison Rate 8.36%	Fees Application: $600 Ongoing: $8 per month	Monthly Payment $929	More Info Compare
Hume Bank MyBlue Fixed Home Loan Principal & Interest 1Y Fixed5% min. depositOwner-occupierOffset account	Interest Rate 6.49%	Comparison Rate 7.03%	Fees Application: $0 Ongoing: $0 p.a.	Monthly Payment $948	More Info Compare
Mystate Basic Variable Home Loan Principal & Interest5% min. depositOwner-occupier	Interest Rate 7.19%	Comparison Rate 7.22%	Fees Application: $0 Ongoing: $0 p.a.	Monthly Payment $1,018	More Info Compare

loading

Load More

Showing 11 of 11 results

Why you can trust Finder's home loan experts

We're freeYou won't pay any more by taking out a home loan with us. Better still, we regularly run exclusive deals that you won't find on any other site – plus, our tables make it easy to compare loans.

We're expertsWe've researched and rated dozens of home loans as part of our Finder Awards. We provide unique insights and our in-house experts regularly appear on Sunrise, 7News and SBS News.

We're independentUnlike other comparison sites, we're not owned by a third party. That means our opinions are our own and we work with lots of home loan lenders, making it easier for you to find a good deal.

We're here to helpSince 2014, we've helped 150,000+ people find a home loan by explaining the nitty gritty details simply and clearly. We'll never ask for your number or email. We're here to help you make a decision.