What is a Home Equity Loan?

February 19, 2014/Tip of the week

A way to utilise the equity in your home.  

Many Australians own homes that are now worth far more than they still owe on their mortgages. With a home equity loan, you can unlock that “equity”. 

What is home equity?

You’ll hear a lot about equity in relation to home loans. Equity is the difference between what your home is worth today and what you still owe on your mortgage. 

Utilising your home equity.

If your home is worth $400,000 and you only owe $100,000 on your mortgage, you have $300,000 in home equity. Previously, the only way you could utilise that equity was by selling your house. Now there is another way. 

Home equity loan – unlocking home equity.

With a home equity loan, the lender lets you borrow against the equity you have built up in your loan. Let’s say you need money for your daughter’s wedding. You don’t have any ready cash but you do have equity in your home. A home equity loan is one of a range of possible solutions.

Talk to an Aqua Financial Services team member today.