How it works.

When you take out a home loan and your deposit is less than 20% of the property's value1, a low equity margin (LEM) applies. This is a percentage amount, typically between 0.25% and 1.5% per annum, that is added to the interest rate on your home loan. It reflects the extra risk involved to the lender. This margin stays in place for as long as you have less than 20% equity in your home.

In time, the equity in your property will increase above 20%. This will happen when you've paid off some of the loan, your property's value has risen or a combination of the two.

To check if you still need to pay the low equity margin:

  • You may choose to pay for a re-valuation of your property if you think the value has increased
  • You can also subtract the value of your home loan from the value of your property, then divide this by the total value of your property. Multiply the answer by 100.
For example:

Take the total value of the property: $850,000

Minus the total value of the home loan: $620,000

Divide $230,000 by the total value of the property: $850,000

The equity in this home is: 27%.

Get a review.

If the result of your calculation is more than 20% equity, it means you are borrowing less than 80% of the property's total value and you might not need to pay the low equity margin. In this case, it's important that you get in touch with us so we can arrange a review.

  • When you come along for your review, you'll need to bring the latest valuation report for your property, such as a registered valuation or government valuation
  • Once we confirm that your equity is more than 20% of the property's value, the low equity margin could be removed
  • If you're on a floating rate, the margin will be removed immediately (provided it has been in place at least six months)
  • If you're on a fixed rate, the margin will be removed the day after the end of the fixed rate term.

Get in touch.

Meet with an expert

Our Mobile Mortgage Managers can come to you, when it suits you best.

Find a Mobile Mortgage Manager

Talk to us

Call us from 8am to 6pm Monday to Friday, 9am to 3pm Saturday.

Call 0800 177 277

Visit us

Make an appointment to talk to a home loan expert in branch.

Find your nearest branch

Apply online.

Our home loan online application form is temporarily unavailable. We apologise for any inconvenience. You can apply for a home loan through a Mobile Mortgage Manager, by calling us on 0800 177 277, or making an appointment at your nearest branch. Existing customers can also apply via Westpac One® online banking.

Things you should know.

1 Eligibility criteria, lending criteria, terms and conditions apply. An establishment fee may apply.