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 is a flexible home loan feature that acts like a large overdraft, allowing you to deposit and withdraw funds. You only pay interest on the outstanding balance, not the full limit.
This can help you pay your mortgage off faster with unlimited extra repayments. However, it requires strong financial discipline to avoid overspending and typically has a higher variable interest rate.
While powerful for disciplined savers, it can be costly otherwise. Always seek advice from a mortgage broker.
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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