Home loan increase

• Your loan balance is the amount you currently owe, and are paying interest on. 
• Your loan limit is the combination of your balance and available credit (when you’re on Principal & Interest repayments, your limit reduces over time).

If your home loan limit increase is approved, interest will only be charged on your balance, not the new limit you have in place. 

Our loan repayments calculator lets you imagine what your increased monthly, fortnightly or weekly repayments might look like.

Calculate new repayments

Pros

• Home loan interest rates are often lower than personal loans, and having one larger repayment means less admin for you.
• You’ll just pay interest on the money you draw down, not your increased home loan limit.
• The top up application process is often quicker than applying for a new loan.
• We’ve removed our top up fee.

Cons

• If you plan to buy an investment property, there are potential tax implications so chat with your accountant.
• Increased debt means more interest, and increased home loan repayments.
• There may be an associated property valuer fee when topping up. And if you top up by opening a separate loan account, some loans may come with an establishment fee. Request a call back and one of our lenders will call you back to let you know.
• Taking advantage of lower home loan interest rate savings (compared to short-term credit card and personal loan rates) only really works when you repay the extra amount within a similar timeframe. Example: let’s say Steph pays for a $20,000 overseas family holiday using her home loan top up, instead of a 3-year personal loan. If she spreads the extra purchase over the life of her home loan, Steph will likely end up paying more interest in total. Instead, Steph should increase her home loan repayments to cover the extra $20,000 within 3 years of topping up.

Yes you can. Instead of increasing your current home loan balance, we could simply set up another home loan account for you. This lets you get features that your current loan might not have, like a fixed or variable rate, an offset account or a different loan term. 

Depending on your situation, there may be an establishment fee on your extra loan. To find out, request a call back and one of our lenders will call you back to chat through your options.

Let’s say you owe money on a personal loan and credit card with another bank, plus a Bank of Melbourne home loan and new car loan. When you successfully apply to consolidate debts with a home loan top up, we'll use the additional funds to pay off all your non-home loan debt accounts for you – even the debts with other banks – then add the combined amount to your home loan balance. 

Tips

• Cancel the loans and credit cards you’ve paid out. 
• You'll only enjoy home loan interest rate savings (compared to higher short-term loan rates) if you repay the extra home loan amount within a comparable term. Let’s say, for example, that you consolidate a $50,000 3-year car loan into your home loan. If you don’t accelerate your home loan repayments to repay that $50,000 by year 3, your car purchase will be spread over the life of your long-term home loan – and you’ll end up paying more interest in total. 
• Do your best to pay off more than the minimum repayment amount, or you could end up paying compound interest (interest on interest). If you find yourself struggling, let us help you get back on top of things.

You can use your loan increase to cover a cosmetic renovation that costs under $100,000, e.g. a kitchen upgrade, floorboards or solar of your roof. 

When your renovation might be more than $100,000, or it includes structural changes like building another room, it may be worth thinking about topping up with our building option. Available on our Standard Variable Rate Home Loan, the option allows you to draw down funds progressively as you meet each stage of your construction milestones – which means you’ll only be charged interest as your build progresses. We can set up a separate loan account and we can manage the progress payments for you, allowing you more project control.

Estimate your home rebuild costs

Homeowners tend to use the extra cash from a top up to: 

• Consolidate debts into a lower home loan interest rate.
• Grow wealth by investing in shares.
• Cover big purchases, like a car, holiday, private school or medical bills.
• Put down a deposit on a new property.

To see your loan details, like your interest rate and repayments, just logon and click your home loan account > Tap the ‘Details’ tab in our App, or click ‘Account details’ on desktop.