Line of Credit Mortgage Rules for Brokers

A line of credit mortgage lets a borrower draw, repay and draw again within an approved limit secured by their property. Assess both the amount they can access and how they will repay it. A low drawn balance can mean a small interest bill while leaving a much larger borrowing commitment.

For brokers, the product name alone doesn’t establish whether a facility is open to new lending or permits the client’s purpose. Westpac Equity Access and ANZ Equity Manager are legacy products, while new NAB FlexiPlus lending is restricted to bridging, as at October 2026.

Distinguish the Credit Structure

A home equity line of credit, also called an equity line of credit, is a revolving borrowing limit secured by residential property. Repayments restore available credit while the facility remains open, subject to its contract. The abbreviation HELOC means home equity line of credit, but an Australian mortgage line of credit follows its Australian lender’s terms.

Equity is the property’s value less the debt secured against it. Usable credit is the lender-approved limit less drawings and other amounts debited to the facility. A rise in property value doesn’t automatically increase that limit.

Structure	How funds become available	What happens to repayments
Revolving line of credit	Drawings within an approved limit, subject to access rights	Deposits reduce the balance and can restore credit. The contract sets required repayments.
Split loan	Separate loan accounts, often with different rates or purposes	Each split keeps its own repayment terms. Splitting a loan doesn’t itself create revolving credit.
Redraw on an amortising loan	Eligible extra repayments already made above scheduled repayments	Scheduled principal and interest repayments continue. Available redraw depends on the loan’s rules.
Offset account	The borrower’s money in a separate account linked to the loan	Its balance reduces the amount used to calculate loan interest. Withdrawing savings doesn’t increase the loan’s approved limit.

Moneysmart’s offset and redraw explanation distinguishes a separate savings or transaction account from extra repayments made into the loan. An offset balance is the client’s money. An undrawn line of credit is potential additional debt.

Worked Example: Limit, Balance and Repayment

This fictional facility has a $200,000 approved limit secured by a home and a $60,000 drawn balance. Its assumed contract requires monthly interest payments, permits further drawings within the limit and requires full repayment at the end of five years. It has no scheduled principal reductions during those five years.

At an illustrative 8% annual rate, $60,000 incurs about $400 interest for a twelfth of a year, excluding fees. Actual daily interest depends on the day’s balance and the number of days. Paying that interest leaves the principal at $60,000.

If the client draws the full $200,000, the same calculation gives about $1,333 a month. The apparent $140,000 available also needs room for any fees or interest debited before payment. These assumptions describe this fictional contract, not a named lender’s product.

For an assessment that uses the full limit, the servicing input is $200,000, even when the current interest bill reflects only $60,000. Servicing means testing whether the client can afford the assessed repayments. The lender’s assessment rate and repayment basis can also differ from the contract’s current interest-only payment.

Incorrect: entering only $60,000 because that’s today’s drawn balance. Correct: declaring the $200,000 limit and $60,000 balance separately, then applying the lender’s line-of-credit assessment rule.

Assess Purpose and Repayment

Assess a line of credit against the client’s planned drawings and a credible way to repay the principal. Flexible access helps only when the client can manage the debt it creates.

Record these details in the file before comparing structures.

• The purpose of each planned drawing, with supporting estimates or invoices where relevant.
• The total limit requested and the maximum balance expected during the project.
• When the client expects to draw and when cash becomes available for repayments.
• The required interest payments, any scheduled principal payments and the final repayment date.
• The income or asset proceeds that repay the principal, including what happens if those proceeds arrive late.
• Existing debts secured by the property and the proposed facility’s effect on total exposure.

Use the approved limit in the application where the lender asks for a limit. Keep the drawn balance in its separate field. Apply the lender’s servicing policy to that exposure instead of substituting the client’s present interest charge for an assessed repayment.

A conventional amortising loan has scheduled repayments that reduce principal over its term. A revolving facility can leave principal outstanding when the client pays only interest or repeatedly redraws repayments. If the client has a fixed one-off expense and wants the debt repaid over a set period, compare an amortising split directly.

For staged work, access timing matters as much as the total cost. Match the expected drawings to the product’s permitted purpose and any conditions on releasing funds. For a single equity release, the cash-out refinance guide explains documenting the purpose of an additional loan amount.

Interest capitalisation means adding interest to the debt instead of paying it from outside funds. If the contract permits this, it uses available credit and increases the balance on which later interest is charged. A limit can therefore become exhausted even without another purchase.

Don’t assume every line of credit permits capitalisation. A facility that requires interest payments still needs those payments, even when unused credit remains. The signed repayment terms decide which arrangement applies.

Compare the lender’s treatment of the limit and repayment obligations before shortlisting. Bulma’s Policy Advisor returns the lender’s policy wording with its answers, so you can retain the relevant assessment rule in your file notes. The lender’s own assessment sets the final borrowing figure.

Check Review and Access Rights

Check the contract and current facility notices to establish how long the credit remains available and what can restrict future drawings. An undrawn limit is useful only while the client’s right to draw continues.

Obtain the signed offer, facility conditions and latest statement. Add any variation, review letter or notice changing the limit. Record the current limit, outstanding balance, next review or expiry date and conditions that must remain satisfied.

A product’s target market determination review date governs the lender’s review of its product design. It isn’t automatically the client’s facility renewal date. Use the offer and subsequent notices for the client’s term.

ANZ’s consumer lending conditions dated 28 January 2026 allow Equity Manager review at any time. ANZ can reduce or cancel the limit with 30 days’ written notice when it reasonably considers this in its legitimate interests.

After that notice period, a reduced limit requires repayment down to it, immediately or within another agreed period. Cancellation requires repayment in full on the same basis. This contractual right doesn’t predict a particular reduction.

Match Future Spending to Continuing Access

If a client’s $100,000 facility has $70,000 drawn and its limit becomes $80,000, only $10,000 remains before further debits. A reduction below the outstanding balance creates a repayment requirement under the applicable contract. A future renovation invoice can’t be funded from credit that has expired or been cancelled.

Before the client commits to future spending, match the invoice dates to the facility’s term and access conditions. Establish a repayment or replacement funding plan for an expiry date. Treat a proposed renewal or refinance as a separate credit decision until approved.

Compare Westpac, NAB and ANZ Equity Products

These three products have different availability and repayment arrangements, so they aren’t interchangeable options for a new general-purpose line of credit. As at October 2026, Westpac’s package conditions identify Equity Access Loan as unavailable, and ANZ’s consumer conditions say Equity Manager is no longer offered. NAB’s current rates page restricts new FlexiPlus credit to bridging purposes.

The table separates existing facilities from new lending. For a legacy account, its signed offer and variations determine the client’s individual limit and security obligations.

Factor	Westpac Equity Access Loan	NAB FlexiPlus Mortgage	ANZ Equity Manager
Availability for a broker’s file	Existing facility management. Closed to new Equity Access lending.	New product restricted to bridging. Existing non-bridging facilities have their own contracts.	Existing facility management. Closed to new consumer Equity Manager lending.
Approved limit	Existing approved limit recorded in the signed contract and subsequent variations.	Bridging target market caps total credit at 80% of the combined homes’ value.	Existing contractual credit limit.
Security	Existing mortgage security recorded in the loan contract.	Homes involved in the bridging arrangement.	Existing property security recorded in the facility documents.
Interest-only or repayment period	Existing contract sets the repayment arrangement and any interest-only period.	Interest-only option for up to 12 months under the bridging target market.	Contractual facility term. Interest is debited to the outstanding balance.
Review or expiry	Existing contract and variations set the relevant dates and rights.	Bridging term up to 12 months, with a defined repayment exit.	Review at any time. Any specified term governs expiry.
Repayment obligation	Existing contract and variations govern required repayments.	Scheduled interest-only payments and final outstanding payment on sale of the existing home.	All amounts due at expiry or within 30 days after demand. Limit cancellation has its separate notice and repayment rule.

Westpac’s Premier Advantage Package conditions distinguish the legacy Equity Access product from loans available for new applications. For an existing client, the approved limit and repayment terms belong to their loan contract. An account balance alone doesn’t establish the remaining right to draw.

NAB’s FlexiPlus target market determination, effective 28 July 2023, describes buying a new home before selling an existing home. It requires income to meet interest and fees, plus a defined exit to repay the debt. The 12-month product review cycle in that document is separate from the maximum 12-month bridging term.

NAB’s current home loan rates page retains that bridging-only restriction. A NAB line of credit held under an older non-bridging contract doesn’t establish that a new client can borrow for unrestricted equity access.

For an ANZ line of credit home loan, distinguish an existing Equity Manager account from a new application. Under ANZ’s consumer conditions, expiry ends the agreed overdrawing facility even though the transaction account continues. That continuing account doesn’t preserve the former borrowing limit.

For new staged borrowing, compare products that accept the client’s purpose and repayment pattern. For an existing facility, reconcile its contract with current statements and notices before relying on future access. Keep the limit, servicing input and repayment exit together in your recommendation.