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. You can deposit funds to reduce your interest payments and withdraw them again, offering great flexibility.
This structure can help you pay your mortgage off faster and is ideal for renovations. However, it requires strong financial discipline and often has a higher variable interest rate than fixed-rate loans. This tool is best for disciplined savers, and seeking advice from a mortgage broker is recommended.
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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