When you are looking for a home equity loan rate talking to a local mortgage broker is a good first step for any home owner. An equity loan is a type of loan in which the borrower uses the equity in their home as collateral.


This type of home loan allows you to borrow the equity in your home, while you still live there.  It is an attractive option for many borrowers as the repayments do not have to be made until the owner either dies or moves into long-term care.  As most retirees do not have a regular income, these loans can suit their needs well.  Usually the loan is paid in full out of the sale of the property.  Home owners over 60 years can borrow between 15% and 45% of the value of the property.

However, these loans can be more expensive than traditional loans and often come with limited benefits. You need to be careful not to end up with negative equity.  A home equity loan should always be considered very carefully as there are many risks associated with this loan type.

Also, appraisal fees, originator fees, title fees, stamp duties, arrangement fees, closing fees, early pay-off and other costs are often included in these loans.  The title charges in secondary mortgages or equity loans are often fees for renewing the title information. Most loans will have fees of some sort, so make sure you read and ask several questions about the fees that are charged.

Borrowers taking out an equity release loan can take the funds either in a lump sum, or in smaller, regular installments, and voluntary repayments are treated as surplus and can be accessed at any time.  Customers should contact a mortgage advisor to discus their options before taking out a reverse mortgage, as there may be implications for pensions and tax assessments.  How much you borrow will depend on your personal circumstances.  However, it is important to decide how this loan will affect you overall.  

You can have access to additional funds while still living in your home and retaining ownership.  This is a great advantage to customers who do not want to move from their home or suburb, but need access to extra funds.  Using an equity release loan enables you to access extra funds on top of your pension or superannuation policy, therefore topping up your weekly or monthly income and budgets.


If you own your own home but do not have enough funds for living expenses then you could look at this type of loan.  A reverse mortgage can also be useful for home owners who may be looking to retire in the next few years, or borrowers wishing to upgrade their property who need access to extra funds.

Using the equity you have built up is a great option for some customers, but it must be considered carefully.  Get detailed and honest advice from an experienced local mortgage broker by calling 1300 787 665 or submitting the online form today.