Home loan comparison

Lender

Variable
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loans.com.au – Variable Home Loan (LVR < 90%)

    Variable
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    HSBC – Home Value Home Loan (Principal and Interest) (LVR < 80%)

      Fixed
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      Newcastle Permanent – Fixed Rate Home Loan (Principal and Interest) 1 Year

        Variable
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        Beyond Bank – Purple Basic Variable Home Loan (New Customer) (LVR 60%-80%)

          Variable
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          Athena – Straight Up Owner Occupied - Celebrate (LVR 50%-60%) (Principal and Interest)

            Fixed
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            IMB Bank – Fixed Rate Home Loan (Principal and Interest) 1 Year (LVR ≤ 80%)

              Variable
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              Liberty Financial – Liberty Low Rate Home Loan (LVR < 95%)

                Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of July 25, 2024. View disclaimer.

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                Refinance: How much equity do I have?

                Accessible Equity
                Accessibly equity is the value of the property entered by the user, less the loan balance entered by the user.

                Usable Equity
                Usable equity is 80% of the accessible equity. This is not necessarily the amount you would be able to borrow, as financiers' lending criteria depends on a number of matters.

                Repayments

                We assume that:
                • Repayments are made monthly;
                • The interest rate charge is divided equally over 12 monthly payments; and
                • Interest is charged to the loan account at the same frequency and on the same day as the repayments are made.

                Only the initial repayment amount is calculated and we assume this repayment stays the same for the loan term. In reality, repayment amounts can change for a variety of reasons.

                How much equity do I have?

                A great place to start when looking to figure out how much equity you have is with online tools, such as our online equity calculator. Equity is a term that we often hear when it comes to purchasing and refinancing property, but what is it? Well, if you have a home loan, equity would be the difference between what you owe your lender on the loan, and your property’s total value. Basically, it’s the value of your property that you own outright. 

                How can I access my equity?

                When you learn how to access your equity to best suit your needs, it can become a powerful tool in your financial quiver. The most common way of accessing your equity is by putting it towards a deposit on a new property. However, there are many other ways to access your equity. These may include utilising your equity to refinance your outstanding mortgage or adding additional borrowings against the current property. Another method is using your property as security on another secured loan. 

                It is important to speak to your bank or lender before making any decisions, as they may have conditions and limits as to how you can use your equity. It is also recommended that you seek professional advice.   

                What is useable equity?

                One very important thing to note when looking into your equity is that your total equity may not be yours to use in its entirety. This is because, generally speaking, your lender will calculate your useable equity as 80% of your property’s value minus the outstanding loan balance. 

                For example, if your home is worth $1,000,000 and your home loan is $600,000, the lender will calculate 80% of your homes value, being, $800,000 in this situation. Therefore, your useable equity would be $800,000 (80% of home value) minus $600,000 (remaining loan balance) = $200,000.

                It is also worth noting that your lender will take into account your serviceability when determining your usable equity. If your personal circumstances, such as reduced income or high liabilities, indicate that you may not be able to comfortably make all your repayments, then you may only have access to what the lenders deems an affordable amount of equity.

                How can I increase equity on my home?

                There are a range of things you can do to increase the equity on your home. The primary method is by making additional repayments on your mortgage. This may mean a lump sum payment or changing your monthly repayments to fortnightly or weekly repayments. Doing this reduces the interest and principal you owe on your mortgage and simultaneously increases the percentage of your property you own.

                Other ways of increasing your equity is through doing things that increase the value of your property. Some of these include:

                • Purchasing in a high growth area: this means that as your property’s value climbs, so will your equity

                • Renovations: renovations are a great way to increase your homes value which will boost your equity

                In short, they key to boosting your equity is doing things that will either reduce debt while maintaining the property’s value or increasing the property’s value.

                Can I use my equity to renovate my home or purchase and investment property?

                Yes you can! Utilising an equity loan to purchase an investment property or renovate your home is a great way to use the equity you have on your home. Using your equity in these ways is a great way to both grow your investment property portfolio and increase your property value once renovations are complete.

                Can I use equity instead of lender's mortgage insurance?

                If you have enough equity on your home, you can put it towards your deposit to avoid paying lender's mortgage insurance (LMI). However, this will typically only be the case if your equity deposit is equal to or above 20% of the property’s value. You should also keep in mind the property you are taking equity from will become another security for the new mortgage.

                Does using equity on my property affect my loan term or my current home loan?

                Using equity on your property will not affect your current loan term. It will, however affect the repayments on your loan as the amount borrowed will increase over the same period. As you use your equity, it is likely you will either be drawing back money you’ve paid towards your loan’s principal, or using your property’s higher value to increase your principal loan amount.

                Can equity be used for anything unrelated to property?

                Equity can be used for a range of things that are unrelated to property. In addition to the things mentioned above, home equity can be used for things such as:

                • Lifestyle expenses such as a wedding or holiday
                • Pay off things like car or credit card debt and other personal loans 
                • Invest in other financial instruments such as shares

                Before considering any of these it is worth talking to your lender because they may have their own terms and requirements.

                Servicing loan after using equity

                If you utilise equity on a property, ensure that the new loan repayment is still manageable based on your income and lifestyle. There are great online tools available such as our equity loan calculator and mortgage calculators to help you start your research. 

                As always, it is very important that you seek independent professional advice prior to making any decisions. 

                Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of 9 July 2024.

                ^The addition of offset sub-account means your comparison rate will change.

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