Line Of Credit

A line of credit can make buying another home or investment property much easier.

An excellent option for homeowners seeking to purchase another property

When you own property and continue to pay off your mortgage incrementally, you will, in turn, gain further equity in your home. With this accumulated equity, you have the opportunity to take out a loan against a portion of the equity in your current home

What is a line of credit?

A line of credit loan is a bit like having a really big chequebook that charges you interest on the balance. It’s also known as an equity line. You can continue to use that line of credit (that chequebook), so long as you have enough equity in your home. This type of loan allows you to harness the purchasing power of that equity, often to buy another property.

Home loan rates are typically the lowest interest rates available when compared to other loans. This makes a line of credit home loan more cost-effective in the long term over other options, such as a business loan. 

If you do make use of a line of credit, it will generally take longer for you to take full ownership of your home. However, the upside is having funds available to make savvy purchases, such as buying another property and building up your investment portfolio. This makes it easier to build wealth over time if done right.

Key Benefits

How does a line of credit work?

When you own property and continue to pay off your mortgage incrementally you, in turn, will gain further equity in your home. With this accumulated equity, you have the opportunity to be able to take out a loan against a proportion of the equity you have in your current home. A line of credit ‘dips into’ your equity, increasing your purchasing power.

Who is best suited for a line of credit loan?

As a line of credit is akin to having a virtually unlimited chequebook, this type of loan is best suited for home buyers who are extremely disciplined when it comes to managing their finances. If you tend to be an over-spender or impulse buyer, then having a line of credit can be a trap.

Nonetheless, there are unparalleled benefits to a line of credit loan. With this type of loan, you have great flexibility in managing the size and timing of your repayments which enables you to access additional funds and even take your current mortgage with you to another home. 

Line of credit loans also often save you interest. How? Your entire income typically goes into your line of credit account and stays in your account until you need it. This means that a large portion of your income should stay in your account longer, thus saving you interest.

financial wellbeing

Frequently Asked Questions

If you are looking to pay off your mortgage fast, a personal line of credit loan is often cited as a complementary tool by directing income from all sources into your line of credit account. You can then draw your living expenses from the account as and when required.

The bottom line is that if you are using your line of credit for smart purchases or necessities, it can be a good thing. But abusing a business line of credit or personal line of credit can result in plenty of financial pain down the road. That’s why our MoneyLab experts provide savvy advice to Australians on a daily basis.


Click here to get in touch today.

You’ll need to be 18 or older to qualify, be an employed Australian resident, and have good credit history. Once you’ve ticked these boxes, your lender will assess your financial situation and your application, and make a decision based on elements like assets, equity in your home, debts, and existing loans. Once the lender approves your application, you will be able to draw down on your line of credit. However, it’s important to do your research before choosing a lender. 

At MoneyLab, that’s where we can provide expert insights and advice.

Speak to us about your mortgage

Call moneylab and one of our finance experts will be able to assist you immediately.
Winning Formula
Contact moneylab Support

Our Team

Mark Blackwood

Mark Blackwood

Mortgage Broker
Brett Hunter

Brett Hunter

Mortgage Broker
Kai Southwood

Kai Southwood

Mortgage Broker
Did you know?

We can also provide Financial Planning advice.

Winning Formula
Have you looked into our

Other mortgage options

Home Equity Loan

Are you a home owner looking for a large sum of money quickly?

If you want to get into the property market sooner rather than later, we may be able to help you with a low or no deposit home loan. Did you know that your new home or investment property may be well within your reach, even without a deposit? Chat with our home loan experts and find out what Australian mortgage option suits you.

Refinance Home Loan

Are you considering refinancing your home loan?

If you want to get into the property market sooner rather than later, we may be able to help you with a low or no deposit home loan. Did you know that your new home or investment property may be well within your reach, even without a deposit? Chat with our home loan experts and find out what Australian mortgage option suits you.