Buy Furniture with Home Loan? Here's How to Save (2026)

In today’s competitive housing market, every dollar counts. Many Australians are exploring ways to stretch their home loan to cover additional expenses, such as furnishing their new abode. If you’re wondering whether you can buy furniture with your home loan, you’re not alone. This comprehensive guide will help you understand your options, whether it’s a smart financial move, and how you can make it happen.

Understanding Using a Home Loan for Furniture Purchase

Home loans are primarily designed for purchasing real estate, but they can sometimes be used for buying furniture or other home-related expenses. The key lies in the type of loan and the flexibility allowed by your lender. Typically, a standard home loan does not cover furnishings; however, there are ways to work around this, such as loan top-ups, redraw facilities, or personal loans.

Rates, Requirements, and Options

Various options exist for using a home loan to buy furniture, each with specific requirements and interest rates. Here’s a detailed look at these options:

Each of these options has its advantages and disadvantages. A loan top-up or redraw facility might offer lower interest rates compared to a personal loan, but they require you to have sufficient equity or available funds in your existing home loan.

Steps to Purchase Furniture with a Home Loan

To use a home loan for purchasing furniture, follow these practical steps:

1. Evaluate Your Equity: Check how much equity you have in your home. This can influence your eligibility for a loan top-up.
2. Consult Your Lender or Broker: Talk to your current lender or a mortgage broker like Esteb and Co, who have access to 83+ lenders, to understand your options and the best rates available.
3. Calculate the Costs: Determine how much you need for your furniture purchase and consider how this will affect your monthly repayments.
4. Apply for the Loan: Submit your application for a loan top-up, redraw, or personal loan, including any required documentation such as income verification or a credit report.
5. Receive the Funds: Once approved, use the funds to purchase your furniture.

Expert Tips and Considerations

Before deciding to use your home loan for furniture, consider these expert tips:

• Weigh the Costs: While using a home loan might offer lower interest rates, it extends the repayment period, increasing the total cost over time.
• Review Your Budget: Ensure that the additional debt won’t strain your finances. It’s essential to maintain a healthy debt-to-income ratio.
• Think Long-Term: Consider how this decision aligns with your long-term financial goals. Will it impact your ability to pay off your home sooner?
• Explore Alternatives: If a personal loan or credit card offers better terms, they might be worth considering, despite the higher interest rates.
• Consult Professionals: Engage with a financial advisor or mortgage broker to ensure you are making the best financial decision for your circumstances.

Frequently Asked Questions

1. Can I use my home equity to buy furniture?
   Yes, if you have enough equity in your property, you can apply for a loan top-up to cover furniture expenses.
2. What is a redraw facility?
   A redraw facility allows you to access extra repayments you've made on your home loan, which can be used for various purposes, including buying furniture.
3. Are there any risks in using a home loan for furniture?
   The primary risk is increasing your debt burden and extending your repayment term, which can lead to higher total interest payments.
4. How does a personal loan compare to a home loan for buying furniture?
   Personal loans usually have higher interest rates but offer flexibility and do not require equity or changes to your home loan.
5. How can Esteb and Co assist in this process?
   Esteb and Co can provide tailored advice and access to a wide range of lenders to find the best option for your furniture financing needs.
6. Can I use a credit card for purchasing furniture?
   Yes, but it's important to consider the high-interest rates and ensure you can pay off the balance promptly to avoid excessive interest costs.
7. What documentation is needed for a loan top-up?
   You may need to provide proof of income, credit score, and details of your existing mortgage.