Home loans

A mortgage (or home loan) is an amount of money lent by a bank or financial institution to a borrower so they can buy a residential property for themselves or a renter to live in. A mortgage is the amount of money owing on the home loan, which will be made up of the principal (the loan amount), fees and interest charges.

Home loan lenders require borrowers to contribute a deposit - a sum of money that forms a percentage of the total loan value.

With a home loan, the lender holds the title or deed to the property until the principal and any interest is repaid. The lender uses the property as security on the loan, which means they can sell it to recoup losses if the borrower can’t continue to make repayments. 

A home loan contract will last for a set length of time - typically 20-30 years. When you get a home loan, your lender will charge you a percentage of the remaining loan balance over this time at weekly, fortnightly or monthly repayment intervals. 

This percentage is known as your home loan interest rate. You can choose a variable rate that may change over time or you can fix your rate for a set period, so it won’t increase during the fixed term.

The amount you can borrow with a home loan depends on a range of things. When your bank considers your ability to pay back your loan, they look at many personal and financial details, which may include your:

• income
• expenses
• liabilities, including other debts and
• existing assets, such as investment properties.

Lenders consider these things to make sure you can make repayments on the loan without placing yourself under financial stress.

You can estimate how much you may be able to borrow with Westpac using our borrowing capacity calculator. 

We calculate your interest in two steps. 

First we multiply the balance on your loan by your interest rate and divide by 365 days in a year. This shows your daily interest charges. 

We then add together your daily interest charges for every day in each month, which produces the monthly interest charge shown on your statement. 

Finally, we divide this up according to your preferred repayment frequency, whether that’s weekly, fortnightly or monthly. This figure is your repayment amount. 

If your loan balance was $500,000 with an interest rate of 4.93% p.a. and monthly repayments, the calculation might look like this:

• 500,000 x 0.0493 / 365 = $67.53 interest per day
• $67.53 x 30 days in September = $2,026 interest for September

You can use our Mortgage Repayment Calculator to estimate repayments and interest charges over the life of a loan. You can also use the calculator to check the effect that extra repayments could have on your home loan.

You can apply online for a new home loan, conditional approval or switch from another bank – it should only take around 20 minutes to apply. You can also request a call back from a lender or apply in branch.

The online application process

1. Apply online

Tell us some details about you and see how much you could borrow. Don’t worry, we’ll save as you go and there won’t be a credit check until you’ve spoken with a home finance manager.

2. Talk it through

A home finance manager will be in touch to answer all your questions, and progress things to the next stage.

3. Conditional approval, if needed

We may be able to provide you conditional approval to help you confidently bid or make an offer knowing how much you can afford. Conditional approval is valid for 90 days . Need more time? We can renew it.

4. Full approval

Once we’ve valued your property and completed other verification, we’ll let you know when your application’s been approved. Accept our loan offer and you’re on your way to settlement – congrats!

Apply online

Many things affect how fast you can pay down your home loan balance. 

The simplest way to pay your loan off faster is to make extra repayments on top of the repayments you’re obliged to make. If you have a fixed rate with us, you can only make $30,000 in additional repayments during the fixed rate period. 

The type of repayment you choose makes a difference, too. Interest-only home loans take longer to pay down than principal-and-interest home loans, because repayments on the interest-only balance don’t reduce the principal you’re charged interest on. Read more about repayment types.

Choosing the right repayment frequency can make a difference over time, as well – choosing true fortnightly repayments when you apply will allow you to make the equivalent of one extra repayment per annum, given there are 26 fortnights in a year.

If your home loan has an offset account, depositing your savings into this account will help to reduce the interest payable on your principal.

You can start refinancing your home loan with Westpac the same way you apply for a new home loan with us – apply online or request a callback and we’ll get in touch to guide you through the process. You can refinance in less than a week with Westpac Priority Refinance Process.

Once you’ve requested a callback, look through our home loan application checklist (PDF 403KB) to see which documents you will need to provide in your application.

Our home lending specialist will call and talk through the details of your financial situation, including your:

• income
• expenses
• assets, and
• liabilities, including credit cards and personal loans.

We’ll ask which type of home loan you want to apply for and answer any questions you have about the different products, interest rates and repayment types. 

We will also ask about the home loan you want to refinance – how much you still owe on the loan and what the property is worth now. Our home lending specialist will explain which forms you need to fill out and how to submit them to us – usually at a nearby branch or by email. We’ll then give you an idea of what you could borrow by refinancing with us and arrange a time for a valuer to come out and confirm the property value.

Once we’ve confirmed a valuation and have your documents, we’ll run a series of checks to finalise your application. If everything is in order, we’ll issue you a Letter of Offer. You’ll need to sign this and return it to us at a branch or by mail.

From here, we do a lot of the work for you. We’ll settle your new loan and discharge you from your old one by paying the balance with your new loan funds, including any fees and break costs. We will also shift the title from the old loan to your new loan with us. If there are leftover funds, we will put these into the Westpac account that you specified during the application.