Buying guide
Revolving credit mortgages: what are they & how do they work?
Everything you need to know about this useful but potentially expensive home loan feature
AI summary
A revolving credit mortgage makes part of your home loan act like a large overdraft. It offers flexibility to withdraw funds and can help pay your mortgage off faster, as you only pay interest on the outstanding balance.
The main drawback is that it requires strong financial discipline to avoid spending the available credit. These loans also typically have higher variable interest rates. Always seek advice from a mortgage broker to see if it's right for you.
What is a revolving credit mortgage?
The benefits of a revolving credits
May help you pay your mortgage off faster
Extra flexibility
Revolving credits can be great but they can be expensive if they're not managed well.
Lower interest rate than a bank overdraft
Only pay interest on money you’ve used
The drawbacks of revolving credits
You need to be disciplined
They’re expensive
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Make sure you do your homework before applying for a revolving credit.
Making a revolving credit work for you
Get expert advice before signing on the dotted line
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