Home loan health check | Review, refinance, use equity - NAB

Review your home loan at least once a year

Start with a simple home loan health check.

  • Confirm your interest rate, monthly repayments and any fees. 
  • Compare your product against similar loans.
  • Make sure the features match how you bank and save.
  • If your income or goals have changed, your loan may need to change too.

If your rate is high or the product no longer suits you, consider refinancing your home loan. Refinancing can lower your rate, reduce fees or give you features that better fit your habits. Weigh the savings against any switching costs and keep the loan term sensible so you do not pay more interest over time. It’s also worth checking if you’re eligible for any refinancing incentives offered by lenders from time to time.

Organise your money with bucket offsets

Offset accounts do more than reduce interest. They can help you manage your money by creating separate buckets for different needs. For example, you could set up:

Everyday spending bucket

Use one offset account for daily expenses like groceries and bills. Keeping this separate helps you track spending while reducing interest on your loan.

Savings bucket

You can create a second offset account for short-term savings goals, like holidays or renovations. This keeps your savings working to lower your interest while staying organised.

Future expenses bucket

Another offset account can work for upcoming big cost like insurance or school fees. Planning ahead means fewer surprises and more control over your cash flow.

This makes budgeting easier and keeps more of your money offsetting your loan balance. With up to 10 offset accounts linked to the same mortgage, bucketing helps you stay organised and reduces the temptation to dip into savings.

Fix your rate or choose a split for more certainty

If predictable repayments help you plan, consider a fixed rate home loan. A fixed rate can provide stability if you expect rate rises. If you want some flexibility, a split loan lets you keep part variable while fixing the rest. 

  • Match the fixed term to your plans. 
  • Note any break costs (economic costs) if you expect to change loans early. 
  • Set reminders to review before the fixed period ends so you can avoid bill shock and choose the next step with confidence.

Make the most of your home equity

Your mortgage can support future plans. If you want to invest, the equity that has built up in your home may help fund a deposit for an investment property.

Understand your equity

Equity is the difference between your home’s value and what you still owe. Knowing this figure is the first step before making any decisions. Use the equity loan calculator for clarity.

Check your borrowing power

Lenders will look at your loan-to-value ratio (LVR) and serviceability. Make sure you understand how much you can borrow without overextending your budget.

Plan for investment goals

If you want to use equity for an investment property, consider rental income, cash flow, and long-term strategy.  Using equity works best when paired with a clear plan.

Maintain a strong emergency fund

An emergency fund helps you stay in control when life changes. A handy rule of thumb is to have enough money in your emergency fund to cover at least three months of living costs, including the mortgage. You might like to keep the money in a high interest account you can access and add to it regularly. Even small amounts grow over time.

Checklist to keep your loan fit for purpose

  • Run a yearly home loan health check, and refinance if the loan no longer suits you.

  • Use offset buckets to organise spending, bills, and savings.

  • Pick fixed, variable, or a split loan to match your needs.

  • Keep your emergency fund topped up.

  • Review home equity before using it for investment.

Ready to purchase your investment property?

Talk to our home loan experts today.

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Terms and Conditions

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.

Target Market Determinations for these products are available at nab.com.au/TMD.