The Home Equity Maximiser is a line of credit loan borrowed against the equity you've built in your property. A line of credit functions in a similar way to a credit card. You have a pre-approved borrowing limit and can draw on as little or as much of that sum as you need, with interest paid on the outstanding balance.
You can access your funds through the offered credit card and cheque book facility.
Your minimum monthly repayments are paid towards interest only on the funds used. And, you have the flexibility to set your loan term, subject to meeting Bank of Sydney’s eligibility criteria.
A variable interest rate applies on the amount borrowed and, as there is no cash deposit required, you will pay a high variable rate.
You can make additional repayments on your line of credit loan without penalty, which would help you repay your loan early and cut back on how much interest you must pay.
The Home Equity Maximiser can be used for personal or investment purposes and can be combined with other Bank of Sydney loan products.
A minimum loan amount of applies, but there is no maximum limit. Only a small deposit is required, but any deposit smaller than 20 per cent means you'll have to pay for lenders mortgage insurance. Be aware that this insurance covers your lender, not you, in the case that you might not be able to pay your loan back.
The Home Equity Maximiser is best suited if you're a disciplined money manager and if you already have substantial equity in a property - since this equity can be unlocked to enhance your wealth creation strategy, such as buying another investment property.
The Bank of Sydney Home Equity Maximiser Loan is a line of credit loan, not a standard home loan product. It allows you to borrow against the equity in either your residential or investment property and to set the term of the loan. This kind of loan is often taken out in combination with an existing home loan and used to fund renovations, a new business, or personal expenses such as a family holiday. It is an expensive loan to maintain due to the high upfront costs and ongoing fees, as well as the higher interest rates charged on the amount borrowed.
There is no deposit required for this loan which may be attractive to first home buyers but the loan is really suited to existing owner-occupiers or investors who hold equity in existing property. Make sure you factor in all the additional costs when considering this loan, and ensure it fits in with your financial goals.
Find out more information about the Home Equity Maximiser Loan from Bank of Sydney at the provided link.
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