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. It offers flexibility by letting you deposit funds to reduce interest and potentially pay your mortgage off faster, while still allowing you to withdraw that money if needed.
However, this structure requires strong financial discipline to avoid overspending. Revolving credit portions also typically have higher variable interest rates than standard fixed-rate loans, making them potentially more expensive if not managed well.
Consult a mortgage broker to see if this is 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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