If you need a loan to buy a second or third property, to invest in stocks or to renovate your home, you can apply for Australian home equity loans. If your existing property has no encumbrance and you have more than 20% of equity on your home, you can apply for a home equity loan.
What is a home equity loan?
Home equity loans or the line of credit loans are given to the home owners to renovate their home or to buy a second property. Home equity is the difference between the value of your home and the money you owe. Suppose you owe $100,000 and your home value is $450,000, so, your home equity will amount to $350,000. You can apply to take a loan worth $350,000.
In this type of loan, the loan balance will reduce each month by the amount of cash coming in and it will increase if you withdraw cash or pay your credit bills with this cash. However, as you have to make the minimum interest-only payment each month, your interest can add upto a large amount over the loan term.
What are the benefits of home equity loan?
The 8 advantages of a home equity loan are mentioned below:
1. It has flexible features, like, you have to pay the interest only each month and if you want, you can pay towards the principal also by paying extra in addition to the minimum repayment amount.
2. You can use the money when you need and can put it back whenever you want
3. The interest rates in this loan is lower than personal or credit card loans
4. This type of loan takes less time to get processed
5. You can use the money for any purpose
6. It has redraw facility, so, if you need extra cash, you can have access to it
7. If you pay wages into your account each month, the interest decreases
8. If you make an extra payment in addition to your fixed repayment amount each month, your loan term will shorten
You need to remember that if you miss to make the monthly payments and become a defaulter, your home will be taken away by the lender. You should also remember prior to taking the home equity loans that, if you opt for a longer loan term, you will end up paying more interest.
Compare Home Equity Loans >>
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Mortgage |
Interest Rate $250k (pa) |
Comparison Rate (pa) |
Features |
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Dream Catcher |
6.13% |
6.47% |
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UHomeLoan - Refinance only (6.14%p.a incl 0.20%p.a lifetime Loyalty Discount) |
6.14% |
6.14% |
The Best Refinance Rate in the Australia.
Enjoy a low 6.14% p.a. (6.14% p.a. includes ... |
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State Custodians Standard Variable Offset Loan |
6.22% |
6.45% |
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First Homebuyers Loan Package |
6.39% |
6.69% |
We help home buyers who qualify for the First Home Owners Grant to buy their first pro ... |
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Renovators Loan Package |
6.39% |
6.69% |
We help home owners who are looking to substantially renovate their existing dwelling ... |
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Construction Loan Package |
6.39% |
6.69% |
We help home buyers who are looking to build a new dwelling or buy one off the plan wi ... |
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Premium Plus Package Home loan |
6.39% |
6.70% |
Comes with a range of flexible repayment options, a 100% Mortgage Offset Account, acce ... |
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goGreen Home Loan |
6.48% |
6.53% |
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Liberty Star Home Loan |
6.49% |
6.79% |
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Professional Package Variable |
6.53% |
6.79% |
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Mortgage Simplifier |
6.62% |
6.62% |
For a limited time, Mortgage Simplifier will have an interest rate discount of 0.16% p ... |
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Variable SmartFit |
6.64% |
6.82% |
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Mortgage |
3yr Fixed
$250k (pa) |
5yr Fixed
$250k (pa) |
Features |
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Fixed Loan |
5.95% |
6.39% |
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UHomeLoan for refinancing - Fixed Rate Loan |
5.98% |
6.84% |
• Competitive interest rates / Loyalty Discount
• Online or over the phone application ... |
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Fixed Rate Loan |
5.99% |
6.69% |
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Fixed Rate Loan |
5.99% |
6.49% |
Loan reverts to Mortgage Simplifier at the end of the fixed rate term. |
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Fixed Rate Home Loan |
6.14% |
6.64% |
2009 AFR Smart Investor Blue Ribbon Award Winner |
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Fixed Loan |
6.14% |
6.95% |
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Standard Fixed Rate |
6.24% |
6.84% |
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Fixed Portfolio Loan |
6.24% |
6.84% |
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State Custodians Standard Fixed Home Loan |
6.26% |
6.61% |
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ANZ Fixed Loan |
6.29% |
6.79% |
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Fixed Rate Home Loan |
6.29% |
6.99% |
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Fixed Home Loan |
6.39% |
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Compare more home loans >>
Home Loan Comparison interest rates in this table are based on a loan amount of $150,000 and a term of 25 years.