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 treats part of your home loan like a large overdraft, offering great flexibility. You can deposit funds to reduce interest and pay your mortgage faster, while still being able to withdraw the money if needed.
However, this requires strong financial discipline, as these facilities often have higher variable interest rates than fixed-rate loans and can be costly if not managed carefully. It's a powerful tool for disciplined savers; consult 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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