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Home Equity Loans in Australia

Break Free Home Loans are a leading Melbourne mortgage broker, with over 20 years of industry experience. We provide lending solutions and advice tailored to your needs. We work closely with clients as trusted advisors and are accessible to clients when needed.

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

A home equity loan is a second mortgage on your house. The loan is based on the difference between the value of your property and the amount of money you owe on your first mortgage. What we can help with is finding you a great deal on your home equity mortgage.

How Does It Work

Home equity loans can be used for a variety of purposes, including home improvements, debt consolidation and more. When you compare home equity loans, it’s important to look at more than just the interest rate. You’ll also want to consider the fees charged by the lender, as well as any penalties for early repayment. We can help you compare the overall profile of various home equity loan Australian providers.
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How To Get A Home Equity Loan

If you have been thinking about taking out an equity home loan in Melbourne, now is a great time to compare rates and terms. We can help you find the best home equity loan for your needs and budget. Give us a call today to learn more and get a home equity loan application done today.
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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

The amount of equity you can borrow depends on a number of factors, including the value of your home, your credit history, and your income. In general, the more equity you have in your home, the more money you’ll be able to borrow. If you’d like the best home equity loan rates for your property, we’re experts in home equity loan comparison. Call us today.
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Alternatives To A Home Equity Loan

If you’re a homeowner in Melbourne, there’s a good chance you have equity in your home. And if you’re looking to borrow money, a home equity loan could be a good option for you. But there are also other options that may be better viable for your situation. The following are just some examples:

Mortgage Redraw

A mortgage redraw facility is a feature of some home loans that allows you to access extra repayments you have made on your loan. It can be a handy way to access funds for emergencies or other purposes, without having to refinance your loan. To be eligible for a mortgage redraw facility you need to have:

  • 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

An offset account is a savings account that is linked to your home loan. The funds in the account are used to ‘offset’ the balance of your loan, which can save you money in interest and help you pay off your loan sooner. However, interest rates are usually higher, and there are also bank fees and charges that come with your account.

Personal Loan

A personal loan is a great way to finance a big purchase, consolidate debt or make a major life change. But before you apply, it’s important to understand the basics of personal loans, including how they work and what they cost. The loan is repaid in fixed monthly payments over a set period of time, typically two to five years.

Credit Card

Credit cards are another type of personal loan. However, they are not recommended for taking out your home equity loan because they charge high interest rates. They similarly operate with revolving payments but may incur changing rates and payment terms as established by the credit line.
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Comparing Australian Home Equity Loan Lenders

If you’re interested in a home equity loan, we can help you find the best deal possible. Simply fill out our easy online form and we’ll match you with lenders who are ready and willing to work with you. There’s no obligation or cost, so why not get started today?

Main Interest Rates

What are the best home equity loan rates? Break Free Home Loans can help you compare home equity loan rates from an unbiased standpoint and give you the tools you need to make an informed decision. When you want to purchase an existing home, build a new property, or renovate an established one, we’re here for you.
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For Owner Occupied

Owner occupied home loans are available for borrowers who plan to live in the home. Owner occupancy comes with more benefits compared to rental property loans. This includes better interest rates, less down payment and more loan options.
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For Investments

A non-owner occupied mortgage is known as an investment property mortgage or rental mortgage for residential properties with 1-4 units. Borrowers who do not intend to live in the property will take out this loan. However, getting an investment property loan is harder and more expensive than getting one for an owner-occupied home. Lenders want to see higher credit scores, debt-to-income ratios, and iron-clad documentation to prove you’re in a strong financial position. They’re known for their stricter approval guidelines and are deemed higher risk compared to owner occupied loans.

Have Any Questions? Ask Us!

Break Free Home Loans’ mortgage brokers have many years of experience behind us. We have relevant, time-tested knowledge given our history in the banking world. We’ve worked in the credit departments of various lenders, hence we know how to create a strong case for our clients. Need to get your loan approved? Talk to us today. We’re more than happy to answer any questions you have.
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FAQ

What is a home equity loan? How does it work? And what should you consider before taking one out for your house? Our customers come to us with many questions about their home loans. With our relevant knowledge and experience, we are best positioned to answer them. The following are just some examples of their most frequently asked questions.

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.

Contact our team

We love to hear from each and every one of you. Please feel free to reach out to us today!