Cheapest Line of Credit Loans
These loans work like a revolving line of credit, allowing homeowners to tap into the equity in their property. For instance, a lender may value your home equity at $200,000 and, assuming you are approved to borrow 80% of this, a line of credit provides easy access to $160,000 – these are funds that can be used virtually as you choose.
A line of credit loan will impact the value of your equity but not necessarily in a negative way. For instance, if the money is used for renovations that improve the value of your home, the end result can be an uptick in your overall equity. In fact, this type of loan can be extremely handy if you’re planning major home improvements, as interest is only paid on the amount drawn down.
BankVic’s line of credit loan, which has climbed from third place last year, comes with a debit card that lets you withdraw cash or make purchases straight from your home loan. The loan is fully portable, meaning it can be transferred from one property to another.
Citibank’s Mortgage Plus
permits up to seven years of interest-only repayments, or five years if you opt for a fixed rate. Borrowers can access up to 90% of their home’s value with the option to capitalise (add to the loan) any lenders mortgage insurance that applies if you borrow more than 80% of the property’s value.
Among the non-banks, State
Custodians’ line of credit loan also won this award last year. As long as the balance remains below the upper limit there is no minimum monthly repayment, making this loan particularly useful if you’re self-employed and earning an irregular income.
Pacific Mortgages,
which was also runner-up last year, lends up to 90% of your home’s value (with lenders mortgage insurance) to a maximum of $5 million.