What is a Line of Credit?
Line of credit
A line of credit is a flexible type of loan that can be applied for against equity in your home. They usually offer unlimited deposits or repayments as your repayments are not set amounts, unlike a home loan.
Other Considerations For a Line of Credit
- They can be a great way to access the equity in your home to use for things like home renovations, investments, even personal purchases such as a new car or wedding.
- The applicable interest rate is set at the time of the line of credit application.
- A line of credit can be a good choice for people who have sufficient equity in their home, but their current loan structure does not allow for withdrawing against that equity.
- A line of credit is treated as a separate loan to your mortgage.
- You must check the conditions of these loans as they are sometimes more expensive than standard products.
Always Seek Expert Independent Advice
We always recommend to secure independent advice from an experienced mortgage broker before you sign on to any mortgage. Consider it as a cross-check before committing to what may be a complicated, inflexible and unsuitable financial commitment. It is also complimentary.