Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.
Are you thinking of taking out a loan for your house? Have you been looking through home equity loan comparison rates? We can help you find the best home equity loan in Melbourne. Talk to our experts today. We provide great service and some of the most affordable home equity loan Australia fees for our clients.
What Is A Home Equity Loan
How Does It Work
How To Get A Home Equity Loan
The General Requirement
The general requirement for a home equity loan is that the property be worth more than the amount owed on the mortgage. The value of your home equity is determined by subtracting the amount you still owe on your mortgage from the appraised value of your home.
For example, if your home is valued at $700,000 and you have a mortgage balance of $400,000 then your home equity is $300,000. This is the amount you can offer to borrow from a bank or a non-bank institution.
How Much Equity Can You Borrow
Alternatives To A Home Equity Loan
Mortgage Redraw
- made additional repayments on top of your regular repayments, and
- have a home loan with this feature.
If you’re not sure whether your loan has a redraw facility, we can help you review your loan contract or speak to your lender.
Offset Account
Personal Loan
Credit Card
Comparing Australian Home Equity Loan Lenders
Main Interest Rates
For Owner Occupied
For Investments
Have Any Questions? Ask Us!
FAQ
How Does Equity Home Loan Work Australia?
You may be wondering, how does a home equity loan work? A home equity loan allows you to borrow against the equity you have in your home to invest in shares, repay your debts, renovate or pay for lifestyle expenses. With rising house prices in Australia, they give homeowners a readily available source of credit.
A deposit on a second property is perhaps one of the most common ways equity on your home or investment property is used. In this scenario, your current property becomes a security on the new debt. Using equity in this manner allows you to buy a second property with no cash deposit.
Do You Have To Pay Back Equity Loan?
Equity is a valuable and often underutilised asset. For business owners, the largest appeal of equity financing is there is no obligation to repay the money acquired through it. It places no additional financial burden on the company, but it also comes with many downsides.
As a personal loan, it’s a great way to build your property portfolio, increase overall wealth and transition from property owner to property investor. Tapping into your home equity can be a convenient, low-cost alternative to borrowing large sums at low interest rates to pay for home repairs or debt consolidation. Having a home equity loan also increases the diversity of your credit file accounts, which could also boost your personal score.
However, it’s important to remember using your equity will increase how much you owe and the interest charged. It’s why it’s recommended you repay the loan on your home as soon as you can. While the equity drawn from your home to purchase an investment is tax effective, any remaining debt on your home isn’t.
You need to make sure you still can afford your new repayments after accessing your equity to avoid financial hardship. Your lender should be able to inform you of your new repayment amounts. As for how long you have to repay your home equity loan, you’ll typically make fixed monthly payments until the loan is paid off. Most terms range from five to 20 years, but some may allow as long as 30 years for you to pay back a home equity loan.
In the end, the right type of loan depends on your needs and what you plan to use the money for. When you need advice on the type of home loan you should get, Break Free Home Loans can help you find the best deal towards financial freedom.
How Fast Can You Get A Home Equity Loan?
Home equity loan approval can take anywhere from a week up to two months. Oftentimes, lenders will say the average window of time to get a home equity loan approved is two to six weeks. In most cases, closings will happen within a month.
Frankly, you can get a home equity loan as soon as you purchase your property. But given how home equity builds slowly, it can take a while before you have enough equity to qualify for a loan. It can take you five to seven years to start paying down the principal on your mortgage and build equity.
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