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, allowing you to deposit funds to reduce interest and withdraw them as needed. This flexibility can help you pay your mortgage off faster.
Key benefits include unlimited extra repayments and lower interest rates than a standard overdraft. However, it requires strong financial discipline to avoid overspending. These loans often have higher variable interest rates, making them a powerful tool for disciplined savers but potentially costly for others.
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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