- Last Updated: 4 May 2026
Home Loans in Australia
Secure the home of your dreams with the right home loan. Get the amount you need with the best rates and terms, and get it approved within your timeline.
- Secure competitive rates and terms across a wide range of lenders*
- Access loan features like offset accounts or redraw facilities
- We offer support for first home buyers, investors, and those wanting to refinance
Get a Home Loan with Dark Horse Financial
1
Contact Our Team
Fill out our online form to apply for a home loan. We’ll get in touch with you fast to understand your situation and make a recommendation.
2
Submit Application
We’ll expertly handle your application from start to finish. Some lenders can approve home loans in just hours.
3
Get Funded
Once approved, documentation is signed electronically, making settlement fast.
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What Is a Home Loan?
A home loan, also called a mortgage, is a loan that a bank or other lender gives you to help you buy a home. You agree to pay back the amount you borrowed (the principal) plus interest over a set period of time, usually 25 to 30 years.
Home loans are secured loans, which means that the property itself serves as security. If you can’t pay back the loan, the lender can take possession of the property and sell it to get the funds back.
People use home loans to:
- Buy a main place to live
- Get an investment property
- Refinance an existing mortgage
- Fund construction or renovation
The minimum amount for a home loan varies by lender, but most require at least $150,000. But in reality, most home loans in Australia are much bigger, usually $1 million or more, especially in cities.
Key Home Loan Terms You Should Understand
Before you sign a loan contract, you need to know the common terms used in home loans. Every Australian who borrows money should know these important terms:
Principal
The principal is the amount of money you borrow from the lender without interest. If you borrow $1,000,000 to buy a home, for example, that amount is your principal. The principal goes down over time as you make payments.
Interest Rate
When you borrow money from a lender, you have to pay interest on it. It is a percentage of the loan amount and is usually paid on top of the principal. It could be:
- Variable: The price can go up or down depending on the market
- Fixed: Set for a certain amount of time, like one to five years.
- Split: Part fixed, part variable.
The interest rate has a big effect on how much you pay each month and how much the loan costs overall.
Comparison Rate
The comparison rate shows the loan’s real cost more clearly by adding the interest rate to most of the upfront and ongoing fees.
Loan-to-Value Ratio (LVR)
This is the percentage of the property’s value that you’re borrowing. For example, if you’re borrowing $800,000 to buy a $1,00,000 home, your LVR is 80%. A lower LVR can help you access better interest rates and avoid Lenders Mortgage Insurance (LMI).
Loan Term
Most home loans in Australia are 25 to 30 years. A longer term lowers repayments but increases the total interest paid. A shorter term increases repayments but reduces interest costs over the life of the loan.
Repayment Type
You can choose between:
- Principal and Interest: Repay the loan balance and interest each month.
- Interest-Only: Repay just the interest for a limited period (common for investors).
Repayment Frequency
Repayment frequency refers to how often you make payments toward your loan. Common options include:
- Monthly: The most typical frequency, where you make one repayment every month.
- Fortnightly: Payments made every two weeks, which can help reduce the loan term and overall interest paid.
- Weekly: Payments made every week, providing the most frequent repayment schedule.
Paying more often can lower the amount of interest you pay over time because your loan balance goes down more often. It’s important to pick a frequency that works with your budget and cash flow.
Lenders Mortgage Insurance (LMI)
Lenders Mortgage Insurance (LMI) is a one-off insurance premium that protects the lender, not the borrower, if you default on your home loan.
In most cases, LMI is required when your Loan-to-Value Ratio (LVR) is above 80%. This means you’re borrowing more than 80% of the property’s value. Essentially, you have less than a 20% deposit.
For example:
- Property purchase price: $1,000,000
- 10% deposit: $100,000
- Loan amount: $900,000
- LVR: 90% → LMI likely required
LMI can either be paid upfront or capitalised into your loan. LMI can range from a few thousand to tens of thousands of dollars. It increases sharply the higher your LVR is.
Key Home Loan Features to Look For
Beyond the loan terms, many home loan products offer features that can save you money and increase flexibility.
Offset Account
An offset account is a transaction account linked to your home loan. The balance in this account “offsets” your loan principal, reducing the interest charged. For example, if your loan is $1,000,000 and you have $200,000 in the offset, you only pay interest on $800,000. Offset accounts are a powerful way to reduce interest while still giving you access to your funds.
Redraw Facility
A redraw facility lets you access any extra repayments you’ve made above the minimum required. This can be useful for emergencies or major expenses.
Keep in mind that some lenders may:
- Set a redraw minimum
- Limit the number of redraws
- Charge fees for withdrawals
Lump Sum Payments and Extra Repayments
Making lump sum payments on your home loan can reduce your loan principal and the total interest paid over time. Many basic home loans allow unlimited extra repayments, giving you flexibility to pay off your loan faster.
Some fixed-rate loans, however, may limit lump sum payments or charge fees for them, so always check your loan terms.
Types of Home Loans in Australia
Below is a detailed overview of the main home loan types available in Australia.
1. Variable Rate Loans
Variable rate loans have interest rates that can rise or fall based on changes in the Reserve Bank of Australia (RBA) cash rate or the lender’s discretion. This means your repayments can vary over time.
- Benefits: More flexibility to make extra repayments, redraw funds, and access features like offset accounts.
- Drawbacks: Repayments can increase unexpectedly if interest rates rise.
- Best for: Borrowers who want flexibility and can handle some uncertainty in repayments.
2. Fixed Rate Loans
A fixed rate loan locks in an interest rate for a set period, commonly 1 to 5 years. Your repayments stay the same during this period, providing certainty and budgeting ease.
- Benefits: Protection from rising interest rates and predictable repayments.
- Drawbacks: Limited flexibility — often restrictions on extra repayments and break fees if you refinance early.
- Best for: Borrowers who want repayment stability and are comfortable with less flexibility.
3. Interest-Only Loans
With an interest-only loan, you pay only the interest on your loan for a fixed period, usually between 1 and 5 years. During this time, your loan principal remains unchanged. After the interest-only period ends, repayments usually switch to principal and interest, which can increase monthly repayments.
- Benefits: Lower initial repayments can improve cash flow, useful for investors or borrowers expecting higher income in the future.
- Drawbacks: You do not reduce the loan principal during the interest-only period, which may increase total interest paid over the loan’s life.
- Best for: Property investors wanting to maximise tax deductions or borrowers with fluctuating income.
4. Split Loans
A split loan allows you to divide your home loan into two or more parts, typically with a combination of fixed and variable rates. For example, you might fix 50% of your loan and leave the other 50% on a variable rate.
- Benefits: You can enjoy the security of a fixed rate on part of your loan while benefiting from the flexibility of a variable rate on the rest.
- Drawbacks: Managing multiple loan portions can be more complex, and some lenders charge higher fees for split loans.
- Best for: Borrowers who want a balance between stability and flexibility.
5. Other Types of Home Loans
Beyond the basic principal and interest or interest-only loans, there are several specialised home loan types designed to meet unique borrower needs.
Low Doc Loans
Low Documentation loans are for those who are self employed or those who can’t get the usual financial documents, like tax returns or payslips. Lenders may accept other forms of proof of income instead of full documentation. For example, business activity statements or a letter from an accountant. Lenders take on more risk with these loans, so they usually have higher interest rates and LVR caps of 80%.
Construction Loans
A construction loan is for people who are building a new home or making major repairs to an existing one. Instead of receiving the full loan amount upfront, funds are released in stages aligned with construction milestones (e.g., laying foundations, frame completion). Most of the time, interest is only charged on the amount drawn down. Building loans often need a detailed building contract and may require more paperwork than regular loans.
Bridging Loans
Bridging loans are short-term loans that you can get when you buy a new house before selling your old one. They “bridge” the gap by giving you short-term funds so you don’t have to wait for your current property sale to go through. These loans are meant to be paid back in a short amount of time, usually between six and twelve months.
Home Loan Application and Requirements Based on Employment Type
Lenders will verify your serviceability differently depending on whether you’re a regular employee or a self employed individual. Here’s how eligibility for home loans in Australia differs:
1. PAYG (Pay-As-You-Go) Borrowers
If you’re employed and receive a regular salary, you’ll usually find the home loan application process straightforward. Lenders can easily verify your income using:
- Payslips (last three)
- Tax Returns
- Group Certificate
2. Self Employed Borrowers
For self employed individuals, lenders assess income differently and usually require:
Full Doc Self Employed Loans
- Financials
- ATO Notice of Assessment
- Savings and Credit Card Statements
- Bank statements
Low Doc Self Employed Loans
- 2 Recent Business Activity Statements (BAS)
- Accountant’s Letter (if available)
If full documentation isn’t available, a low doc loan may be an option, though these may come with higher interest rates and LVR caps. We can help match you with a lender that understands self employed finances.
Benefits of Home Loans
Access property ownership sooner
Spread repayments over the long term
Build equity over time
As you repay your loan and property values increase, you build equity in your property. This equity can be used in the future to fund investments, renovations, or additional property purchases.
Potential for long term capital growth
Property has historically been a long term growth asset. Owning property through a home loan allows you to benefit from any increase in value over time, which can contribute to overall wealth creation.
Access to loan features
Many home loans offer features such as offset accounts, redraw facilities, and the ability to make extra repayments. These features can help reduce interest costs, improve cash flow, and give you greater control over how you manage your loan.
Refinancing a Home Loan in Australia
Refinancing a home loan means replacing your current loan with a new one, either with the same lender or a different lender. The goal is usually to secure better rates, reduce repayments, or improve loan terms. Many borrowers refinance as their income, equity, and priorities change.
Why People Refinance
Refinancing is usually done for one or more clear reasons.
- To secure a lower interest rate and reduce repayments
- To access better features like an offset or redraw
- To consolidate other debts into the home loan
- To access equity for renovations, investing, or other needs
How Refinancing Can Help
The biggest benefit is often interest savings. Even a small rate reduction can save tens of thousands of dollars over time, especially in the early years of a loan.
Refinancing can also improve cash flow. Lower repayments or a better loan structure can make monthly budgeting easier.
For borrowers who have built equity or improved their income, refinancing can unlock options that were not available when the original loan was taken out.
When Refinancing Makes Sense
Refinancing is usually most effective when:
- Your loan is no longer competitive
- Your income or credit profile has improved
- Your property value has increased
- Your current loan lacks flexibility
- Your goals have changed since you first borrowed
- You’re a business owner and you need to pay off tax debt
Using Home Loans to Refinance Business Tax Debt
Many business owners use home loans to refinance ATO tax debt and improve their overall financial position.
Tax debt can become difficult to manage when repayment plans are short term or when cash flow is already under pressure.
By using the equity in your home for financing, you can spread the repayment over a longer term and significantly reduce the immediate repayment burden. This can improve cash flow, stabilise your business, and provide breathing room to focus on operations.
When this strategy makes sense
- You have sufficient equity in residential or investment property
- Your business is viable but under cash flow pressure due to ATO repayments
- You need to reduce short term repayment obligations
- You want to avoid enforcement action or escalating penalties
Using Our Home Loan Calculator Australia
If you’re considering buying a home any time soon, it’s a great idea to get an initial estimate of what your repayments may look like over your preferred term. We created a calculator that does just that. Just input your estimated loan amount, interest rate, and term to see what you’ll most likely pay in monthly instalments.
Frequently Asked Questions
The deposit required for a home loan typically ranges from 5% to 20%of the property value. A larger deposit reduces the amount you need to borrow and may allow you to avoid lender’s mortgage insurance, which is usually required when borrowing more than 80% of the property value.
The amount you can borrow depends on your income, living expenses, existing debts, credit profile, and the lender’s assessment criteria. Lenders calculate your borrowing capacity based on how much you can afford to repay. Home loan amounts in Australia can start from $50,000 and go up to millions.
Home loan approval timeframes vary depending on the lender. Pre approval can often be obtained within hours at some lenders, while full approval may take anywhere from a few days to several weeks. Speak with our team to get connected with a lender that can approve and settle a home loan within your required timeline.
Yes, you can get a home loan if you are self employed. The requirements for a self employed home loan are different from home loans for PAYG borrowers. Full doc self employed home loans may require financials, notices of assessment, savings and credit card statements, and bank statements. For low doc loans, you will need to present your 2 most recent BAS or an accountant’s letter, if available.
Yes, you can use the equity in your home to pay out tax debt. Equity is the difference between your property value and your existing loan balance, and it can usually be accessed through refinancing.
By using equity, you can convert short term ATO repayment obligations into a longer term loan with lower repayments. This can significantly reduce cash flow pressure and allow your business to operate more effectively.
Yes, you can refinance your home loan to clear outstanding ATO debt, provided you meet the lender’s criteria. This usually involves replacing your current loan with a new one that includes the tax debt amount.
Refinancing allows you to consolidate the ATO liability into your home loan, spreading repayments over a longer term and potentially reducing the overall repayment burden. This can help stabilise cash flow and avoid ongoing penalties or enforcement action from the ATO.