Equity-Based Home Loans
Secure an additional loan using your home equity with OzBroker
What Is An Equity-Based Home Loan?
An equity-based home loan offers you the opportunity to borrow against the value you own in your home. This could be for purposes such as investment in properties or stocks, debt consolidation, renovations, or covering lifestyle costs.
Recent trends have shown a substantial increase in house prices across much of Australia, presenting homeowners with an accessible and economical borrowing option. Leveraging your home equity to diversify your investment assets can be an excellent method for generating passive income in the current Australian economic environment.
How Can I Utilise My Equity?
Your equity can be used for various legitimate purposes, including:
- Acquiring another property.
- Purchasing or investing in a business.
- Investing in stocks, shares, or mutual funds.
- Consolidating debts, like credit cards or personal loans, into your home loan. Acquiring a new vehicle or boat.
- Undertaking home improvements.
- Financing a vacation, wedding, or medical bills.
- Keeping reserves for maternity leave.
The equity based mortgage, however, must not be used for unlawful activities. Some lenders might permit refinancing to settle a debt to the ATO. If you’re uncertain whether your loan purpose is valid, please contact us at 0426667696 or inquire online.
Is An Equity-Based Loan Right for Me?
We at OzBroker suggest equity-based home loans for individuals who are financially responsible. Unfortunately, some applicants misuse the loan on lifestyle expenditures and lack a repayment strategy.
Typically, it’s feasible to release equity up to 80% LVR (80% of your property’s value) minus the outstanding amount on the property. Some lenders might even allow up to 90% LVR releases, although a single LMI premium would be applicable. Refinancing your existing loan is mandatory during the equity loan application process.
FAQ
Do Equity Based Home Loans Have Different Interest Rates & Fees Than Regular Home Loans?
You don’t have to pay more interest for a loan on your home equity with OzBroker. The trick to finding a good rate is to look at different options because banks often charge more for Line of Credit loans and have strict rules for approving them. At OzBroker, we can assist you in comparing all the loan options out there, helping you find the one with the lowest rates and fees.
Is A Line Of Credit The Right Choice For My Equity Based Mortgage?
Banks often suggest a Line of Credit (LOC) because it has a higher interest rate than a standard home loan. However, we at OzBroker typically advise choosing a 100% offset home loan. It has similar features but a lower interest rate.
Plus, a 100% offset home loan helps you manage your money better. You can keep your funds in redraw, in the home loan, or in the offset account. This way, you can keep your everyday spending separate from your available equity.