Home News Should I get a line of credit?

Should I get a line of credit?

Font size :
Nila Sweeney

A line of credit can be useful. If you have built up a reasonable amount of equity in your home you can easily access it to purchase other assets or items. For example, you could draw down on your home equity to fund a new car.

The benefit of this is that you are effectively borrowing for a car at home loan rates. Interest rates on personal loans or car loans are usually significantly higher than home loan interest rates.

Some share investors also use a line of credit to invest in the share market. When they sell shares they put the money into the line of credit, reducing the balance and increasing the equity they have in their home. When they want to purchase shares, they draw down on their equity.

Using the equity in your home this way can be an effective form of financing because home loan interest rates are the lowest interest rates many people are offered.

One thing to keep in mind is that if you use the equity you have built up in your home to fund other purchases it’s likely to take a lot longer to own your home. This may not necessarily be a bad thing. If you using the money for investments which earn a good return you are likely to increase your net wealth in the long term.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

MyState refunds over-charged interest and fees to customers MyState refunds over-charged interest and fees to customers

These errors were the result of shortcomings in MyState’s manual administration processes, ASIC said Read more

House prices return to more affordable levels in mining towns House prices return to more affordable levels in mining towns While the end of the mining boom has had a negative impact on property prices, homes in the region have become more affordable ... Read more

Borrowers should anticipate a possible rate hike Borrowers should anticipate a possible rate hike Some experts advise borrowers to look for a fixed loan that allows extra repayments so that they can whittle down the balance sooner ... Read more

Why choosing the right mortgage is hard for first-home buyers Why choosing the right mortgage is hard for first-home buyers Many feel overwhelmed by the sheer range of products and interest rates on offer, a new survey reveals ... Read more

More mortgage news and articles

Sponsored Links

Friday, Jul 28, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords