Estimate your maximum line of credit limit, available credit, and interest-only monthly payment on your drawn amount.
Rates as of Q2 2025 (example — line of credit rates are usually variable)
This calculator estimates the maximum credit limit available on a home equity line of credit (also called an equity access loan or LOC product in Australia), the available credit after deducting your existing mortgage balance, and the monthly interest-only payment on the amount you plan to draw. A line of credit is a flexible revolving facility secured against the equity in your home — you draw what you need, when you need it, and pay interest only on the drawn amount.
A line of credit charges interest only on the amount drawn, at the applicable variable rate. Most Australian line of credit products do not require principal repayments — you pay interest only on the outstanding drawn balance, with the full drawn amount repayable when the facility is closed or the property is sold.
Formula: LOC Limit = Property Value × Limit %. Available Credit = LOC Limit − Existing Mortgage Balance. Monthly Interest = Draw Amount × (Annual Rate ÷ 12).
Example: A A$700,000 property with a A$400,000 existing mortgage and a 65% LOC limit: Credit limit = A$455,000. Available credit = A$455,000 − A$400,000 = A$55,000. Drawing A$30,000 at 8% (example rate — variable rate; enter your actual rate): Monthly interest = A$30,000 × 8% ÷ 12 = A$200.00/month. (Note: this example is for illustration purposes only.)
Home equity lines of credit (sometimes called equity access loans, home loan top-ups, or LOC products) are available from major Australian banks and building societies, typically as an add-on to an existing home loan or as a standalone product secured against your property. The interest rate on a line of credit is generally variable and somewhat higher than a standard variable home loan rate, reflecting the flexible and revolving nature of the facility. Because there is no required principal repayment, line of credit products carry a risk that the debt can persist or grow over time if the borrower only makes interest payments and continues to draw on the facility — ASIC has previously highlighted this as a concern for older Australians using equity release products. Regulation of home equity lines of credit in Australia falls under the National Consumer Credit Protection Act (for residential properties), which requires the lender to conduct a responsible lending assessment. For investment purposes, the interest on the drawn amount is generally tax-deductible to the extent the funds are used to produce assessable income (e.g., purchasing shares or an investment property) — consult your tax adviser for specifics. The combined loan-to-value ratio (CLTV) — your total debt (existing mortgage + LOC drawn amount) ÷ property value — should be monitored to ensure it stays within lender limits and manageable levels.
A home equity loan provides a fixed lump sum that you repay over a set term with fixed principal-and-interest repayments. A line of credit provides a revolving credit limit from which you can draw and repay flexibly, paying interest only on the drawn amount. The home equity loan is suitable for a specific, defined purpose with a clear repayment plan; the line of credit is better for ongoing or variable needs where flexible access to funds is important. The home equity loan guarantees principal reduction; the line of credit does not require it.
Generally yes — line of credit rates are typically slightly higher than standard variable home loan rates, reflecting the flexibility of the revolving facility. In Australia, the difference is often 0.5-1.5% above the standard variable rate, though this varies by lender. Because LOC rates are variable, they move with the lender's standard variable rate (which broadly tracks the RBA cash rate), so your monthly interest cost can change over time.
Most Australian line of credit products are structured as interest-only for the life of the facility — you pay interest on the drawn balance each month, but there is no required principal repayment until the facility is closed (typically when the property is sold or refinanced). This is different from a standard home loan where each repayment reduces the outstanding principal. Making voluntary principal repayments on a line of credit reduces your interest cost and outstanding balance.
Yes — this is a common strategy in Australia. Drawing equity from your home via a line of credit to fund the deposit on an investment property allows you to leverage the equity in your home to purchase additional assets. Importantly, the interest on the LOC funds used for the investment property deposit is generally tax-deductible (as the borrowing is for an income-producing purpose), while interest on any funds used for personal purposes is not. Keep the draws clearly separated and discuss with your accountant to ensure the deductibility is properly claimed.
The maximum LOC limit is determined by the lender's LVR cap (typically 80% of the property value in total, including your existing mortgage) and their serviceability assessment of your ability to service the interest on the full limit. The "available credit" shown by this calculator is the portion not already used by your existing mortgage — but the lender may impose a lower limit based on the purpose of the funds, your income, and other factors.
ASIC has highlighted risks associated with older Australians using reverse mortgages and home equity release products (of which a LOC can be one form), as a balance that grows via interest while the property may decline in value (in a falling market) can significantly reduce the equity available for future needs or estate planning. Older Australians considering a LOC or reverse mortgage for retirement income should carefully consider the long-term equity implications and seek independent financial advice, particularly from a specialist in aged-care financial planning.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice. Line of credit interest rates are typically variable and the example rate used does not represent any specific lender's current rate — actual rates, credit limits, and conditions vary by lender, property type, and borrower circumstances. This calculator shows interest-only costs on the drawn amount and does not model compound interest if interest is not paid on time. Consult a qualified financial adviser and your lender for advice specific to your circumstances.