Home Loan calculators & tools

In its simplest form, how much you can afford to borrow for a home loan depends on your income, minus your expenses. We’re looking to see how much debt you can ‘service’, and therefore how much we may be able to lend you. 

Try out our ‘How much can you afford’ calculator to see how much you could potentially borrow.

Keep in mind that the result doesn’t take into account how much you have saved as a deposit and how that may affect repayments – try out our repayment calculator for that.

Lenders Mortgage Insurance is an insurance designed to cover Westpac, that’s put into place when you take out a home loan and your deposit is less than 20% (although it can apply in other circumstances too). It’s to protect Westpac should something happen, leaving you unable to pay back your loan in full. Calculated as a percentage of the loan amount, you can pay it upfront as a one-off cost, or add it to the cost of your loan repayments.

Lenders Mortgage Insurance shouldn’t be confused with mortgage protection insurance, which is insurance for you that covers your mortgage and/or your mortgage repayments in the event of death, disability, unemployment or reduced income.

Stamp duty is a tax you pay when you buy a home. The amount varies according to the amount borrowed and the purchase price, as well as what state or territory your home is in. Stamp duty is expensive, so it’s worth checking with your state as to whether your home might qualify for an exemption or reduced rate – particularly if you’re a first home buyer.

Just as the stamp duty rate changes from state to state, so does the timeframe in which you need to pay it, from it being due at settlement, to within 30 days, or up to 3 months after transfer of the property to your name.

Refinancing is the term used when you switch your home loan from one provider to another. Refinancing your mortgage involves looking at a number of different factors and it can be complicated so take your time, do research and plan ahead.

People usually refinance their mortgage to:

• take advantage of more competitive interest rates
• shorten the term of their mortgage
• take advantage of another provider’s products or services
• be able to borrow a larger amount, or
• change their loan structure.

Don’t confuse refinancing with refixing, which is when you lock in a new interest rate for a certain period of time once your current fixed interest rate period is up. Or with restructuring, which is when you review things like whether your loan is variable or fixed, or whether you could pay it off more quickly with an Offset account.

We know saving a home loan deposit can feel daunting. One way to feel more in control is to understand your finances, how much you can save per month, and, importantly, how much you need to save.

Commonly, lenders require you to have 20% of the value of the home you’re looking to buy saved as a deposit. This is known as the Loan to Value Ratio, or LVR. However it’s worth exploring tools to help you get there or to reduce the deposit you need. This could include the First Home Owner Grant, Home Guarantee Scheme, or seeing if your parents are willing to provide a Parental Guarantee using the equity in their home.  With a deposit less than 20% of the value of the home, you’ll more than likely have to meet the costs of Lenders Mortgage Insurance.

Your equity is the difference between the current market value of your property and the amount remaining on your home loan. As you pay off your home loan, the equity you have in your home grows, and if the property’s value increases, your equity will go up as well.

Your usable equity is the amount of equity in your home you can access and use as collateral if you want to borrow more. A bank will typically lend you up to 80% of a property’s market value. Subtract from that the amount you owe on your home loan and the remainder is your usable equity.

So let say you own a property with a market value of $600,000 and you owe $200,000 on it. Your usable equity is 

$600,000 x 80% = $480,00 - $200,000 = $280,000.

We’ve developed a useful home equity calculator to help you work out your equity position.