Loans home equity loans

When does a loans home equity loan really make sense, and what should you evaluate before applying?

A loans home equity loan can be a powerful financial tool but only when used at the right time and under the right conditions. It’s not for everyone or every situation. It makes sense when you already have a property with significant built-up value (at least 20% of the total), need a substantial amount of money for a clear goal (such as renovations, debt consolidation, or investment), and have stable income that allows you to meet monthly payments without straining your budget.

• This type of loan is also attractive if you’re looking for more competitive interest rates than personal loans or credit cards. Because it’s secured by your home, the lender takes on less risk, which often translates into better terms. However, before applying, it’s essential to assess the total cost including interest, fees, and other expenses and make sure the real benefit justifies the loan.

Also, be sure to have a clear and responsible plan for using the funds. It’s not the same to borrow money to increase your property’s value as it is to cover non-productive expenses. If you’re considering this type of financing, ask yourself first: Do I have a clear strategy? Can I handle the repayments without financial stress? Is it worth using my home equity for this purpose?

Simple, Smart, Chill.
That's Heynest

Skip the paperwork. Connect with your broker online in minutes.

Digital & Fast

Your Perfect Match

We link you with the expert who understands your goals.

Tailored Options

Access the best mortgage deals, hassle-free.

Loans home equity loans: differences from other types of credit

It’s common to confuse home equity loans with other financial products like home equity lines of credit (HELOCs) or mortgage refinancing. However, there are key differences worth understanding before making a decision.

• A home equity loan provides a lump sum of money with a fixed rate and set term ideal for one-time needs such as home improvements or paying off a specific debt. In contrast, a HELOC is a revolving line of credit with a variable rate, more like a credit card secured by your home.

It also differs from mortgage refinancing, where you replace your existing loan with a new one, often with better conditions. With a home equity loan, you keep your current mortgage and take out an additional loan based on your available equity. This can be beneficial if your existing mortgage already has favorable terms you don’t want to lose.

Stop Stressing: Why a Broker is the 'Smart, Chill' Way

HeyNest

Traditional Bank

Access to many lenders

Compares and negotiates the best market rates for you.

Dedicated, personalized guide every step of the way.

Only offers their own limited products.

Standard, often non-negotiable in-house rates.

Standardized service; often no single dedicated contact.

Loans home equity loans in Australia: how to find the best option with expert help

The Australian market offers many home equity loan options, but navigating them can be complex without expert advice. Conditions, rates and requirements vary significantly between lenders. Moreover, legal terms can hide fees or less favorable clauses. This is where platforms like HeyNest provide real value connecting each user with an independent, specialized mortgage broker who compares, analyzes and negotiates the best available options based on your financial profile.

• Unlike dealing directly with a bank, HeyNest gives you a broad view of the market including large institutions, regional lenders and digital options. The process is entirely online, reducing wait times and simplifying paperwork. Most importantly, your broker accompanies you at every step, from the application to disbursement, ensuring you understand each term and that the loan truly benefits you.

Thanks to its nationwide coverage (Sydney, Melbourne, Brisbane, Perth and regional areas), HeyNest brings deep local market knowledge essential in a country where mortgage conditions can differ widely between states and cities.

Simple
Smart
Chill
Heynest

Can I get one if I already have an active mortgage?

Yes. It’s entirely possible to take out a home equity loan while still paying your original mortgage. As long as your property has enough available equity and you meet the lender’s requirements, you can access this type of financing.

How much can I borrow?

It depends on your property’s current value and your existing mortgage balance. Typically, lenders allow you to use up to 80–90% of your available equity. For example, if your home is worth AUD 700,000 and you owe AUD 400,000, you could potentially borrow around AUD 240,000, depending on other factors.

Fixed or variable rate?

It depends on your risk profile and needs. A fixed rate offers security and predictable payments throughout the loan term ideal for those who value stability. A variable rate may start lower but can fluctuate with the market, potentially increasing your repayments over time.

Frequently asked questions