A line of credit (LOC) mortgage allows you to use the loan as your cheque account so you can draw down and repay the loan as you choose.

You can also use the line of credit to carry out renovations, pay your bills or invest in shares.

It’s similar to a credit card in that it allows you to withdraw funds at anytime up to a set limit.

Which lenders can offer line of credit loans?

  • CBA: MAV package line of credit residential equity / Line of credit residential equity
  • Rams: Line of credit / Line of credit professional pack
  • Westpac: Premier advantage equity access loan / Equity access loan
  • St George: Advantage home loan package portfolio loan variable rate / Portfolio loan variable rate
  • Suncorp: Money manager asset line / Asset line
  • ANZ: ANZ portfolio loan equity manager / ANZ portfolio home loan / Breakfree equity manager / Equity manager / Breakfree equity manager / Professional benefits equity manager
  • NAB: NAB home equity line of credit
  • And many more

The interest rates and fees be offered on a line of credit facility vary across all lenders but most will offer similar features such as ATM access, cheque books and internet banking.

If you would like to know more, please call us on 1300 889 743 or complete our free assessment form to speak with one of our mortgage brokers today.

Do I still need a bank account?

Generally, if you have a Line Of Credit (LOC) then you do not need a bank account as all of your income and expenses can be run through your home loan.

For this reason, LOCs are also known as “all in one” accounts or all in one home loans. There are some dangers in using a line of credit in this way.

Read on for more information.

What are the benefits from a line of credit?

A line of credit gives the borrowers a chance to experience a sense of freedom and choice with their mortgage. If you are cautious with your money and want the flexibility a line of credit can offer, then this type of loan would be well suited to you.

There are key benefits you should consider when it comes to getting finance under this type of finance:

  • You can withdraw up to your credit limit without having to seek approval from your lender.
  • The credit limit amounts are usually quite large which mean you can make larger purchases without going over the limit.
  • The interest rates are generally lower than that offered through a credit card, often at home loan rates or just a little higher.
  • You will have easy access to your funds as most line of credit facilities offer cheque books, internet and phone banking, and a range of other useful transactions.
  • You can consolidate your debts by transferring other debts such as a personal or car loans into your mortgage.
  • You can reduce the balance and consequently save on interest by directing all of your income into your home loan account.
  • You are given a choice to make repayments on either a monthly basis or you may not have to make a payment as long as you remain below the limit.

Is a line of credit suited for me?

In general, borrowers who cannot afford to make significant additional repayments would be worse off if they were to refinance to a line of credit. This is because a line of credit usually offers a higher interest rate which would outweigh any savings made by combining your accounts.

A mortgage through a line of credit would generally be an interest only loan without a set term for the loan to be repaid. Therefore, the borrower then has the choice on deciding when they will make payments on the principal, which would suit some borrowers and would be a disaster for others!

Usually, a line of credit is best suited to people whose income fluctuates and would be able to make additional payments. It would also benefit borrowers who have a flexible income and can afford to pay a interest rate higher than the standard variable rates.

What are the risks involved with a line of credit?

Although a line of credit gives borrowers a considerable amount of freedom, they are not for everyone.

Just like any credit card account, a line of credit would require good budgeting skills and financial discipline so that you can stay within your financial limits.

If you are the type of person who finds difficulty in managing your money, then a line of credit might not be your best option.

How do I apply for a line of credit home loan?

Please enquire online or call us on 1300 889 743 if you would like to talk with a mortgage broker who can give you expert advice on a line of credit home loan.

  • Callum

    Hi, I’d like to get a LOC with one of those banks you’ve mentioned above. How shall I proceed with this with you guys?

  • Hey Callum, you can simply place an online enquiry with your details and we will have one of our expert mortgage brokers look into your application:

  • The Boss

    I have a savings account with NAB but how are they when it comes to LOC loans?

  • We have an expert’s review on NAB bank and how their home loan deals and offers compare with other banks and lenders in Australia. Please check out the NAB home loan review page for all this info:

  • Benjamin

    A mortgage through a line of credit sounds very fishy and weird to me…

  • A mortgage through a line of credit would generally be an interest only loan without a set term for the loan to be repaid. So you have the choice on deciding when to make payments on the principal. Usually, this is best suited to those with fluctuating income and can make additional payments. It would also benefit borrowers who have a flexible income and can afford to pay a interest rate higher than the standard variable rates.

  • Nelly

    Do you perhaps also have a review on Suncorp bank? Would be great if there was also something on their commercial wing. Thanks.

  • Hi Nelly,
    Yes, we do have an expert’s review on both Suncorp Bank as well as Suncorp Commercial. Please check them out using the following links.

    Suncorp Bank review:
    Suncorp Commercial review:

  • Hoit

    Hey there,
    I’ve heard that a line fee is applicable with LOCs so I would like to know about how much I may need to pay if I do indeed have to?

  • Hey Hoit,

    A line fee is a fee you pay for a bank to keep credit available for you to use and this can be a Line of Credit (LOC), term loan, overdraft or other credit facility. As a general rule, you’ll typically have to pay a line fee of 0.3% to 1.0% of the loan limit per annum in the case of a residential security, and 1.0% to 2.0% for commercial.

  • Cali

    Hi there, can you quickly explain in simple terms how a HELOC is different to a credit card?

  • Hi Cali,
    Home Equity Line Of Credit (HELOC) is secured against the equity in a property and is considered a secured loan. The interest rates on HELOC are similar to home loan interest rates. Credit cards are unsecured loans as they are not secured on any assets.