What is line of credit?
A line of credit home loan is a revolving facility secured against your property — you can draw down and repay up to an approved limit without re-applying, with interest charged only on the balance drawn.
A line of credit (LOC) home loan is a revolving credit facility, similar to a credit card but secured against property equity. The lender approves a maximum limit (commonly $20,000-$500,000 against useable equity); you draw down and repay freely without re-applying. Interest is charged daily on the drawn balance, not the limit.
LOCs are commonly used for renovation funding, share investment, business cashflow, or as a standby emergency facility. The rate is typically 0.30-0.80% above the standard variable home loan rate — premium pricing for the revolving feature.
Trade-offs: LOCs often have no required minimum repayment beyond covering interest, so principal can compound indefinitely if not managed. They're best used as a disciplined tool by borrowers with a clear repayment plan, not as a permanent borrowing source.
LOC · line of credit · home equity line of credit · revolving home loan
- Home equity — Equity is the portion of the property you own outright — current property value minus the outstanding loan balance. A $7…
- Redraw facility — Redraw is the ability to withdraw extra repayments you've made above the minimum schedule — same interest saving as offs…
- Offset account — An offset account is a transaction account linked to your home loan whose balance reduces the loan amount on which inter…
General information only — not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.