Services · Refinancing & equity
Line of Credit & Equity Release
You've built up equity in your home and now you want to put some of it to work, for a reno, an investment deposit, or income in retirement. A line of credit or an equity release loan lets you draw on that equity without selling. Each suits a different stage of life.
Line of credit
A line of credit is an approved limit secured against your home that you draw from as you need, a bit like a big flexible facility. You only pay interest on what you've actually used. People use it for renovations, an investment property deposit, or to have funds on standby. It takes discipline, because the limit sits there and it's easy to treat as spending money rather than borrowed money.
Releasing equity through refinancing
More often, the simplest way to access equity is a straight refinance or a loan increase, where we lift your loan and take the difference as cash for a specific purpose. It usually comes at a sharper rate than a line of credit and keeps things simple. If your goal is a deposit for the next property, that's often the cleaner route. Have a read of refinancing and equity and how to refinance.
Borrow for a reason, not just because you can
Equity is real money secured against your home. I'll only ever set this up around a clear purpose, with repayments that still fit your budget. Pulling equity to fund lifestyle spending is how people go backwards.
Equity release in retirement
For older homeowners, equity release usually means a reverse mortgage: you borrow against your home and don't make repayments while you live there, with the loan and interest repaid when the home is eventually sold. Australian reverse mortgages carry a no-negative-equity guarantee by law, so you can never owe more than the home is worth. The interest compounds though, so it eats into what you leave behind. The government's Home Equity Access Scheme is often a cheaper option worth checking first. This is a decision to make with family and advice, and I'm happy to talk it through.
Which one fits
- Still working and want flexible access for investing or renovating: a line of credit or a loan increase.
- After a one-off lump sum for a clear purpose: usually a refinance is simplest.
- Retired, asset-rich and income-poor: a reverse mortgage or the Home Equity Access Scheme, with advice.
Sitting on equity and not sure how to use it?
Let's look at the cleanest way to access it for what you actually need.
Frequently asked questions
What's the difference between a line of credit and redraw?
A line of credit is a standalone facility with its own limit you draw from freely. Redraw sits inside your existing home loan and lets you pull back extra repayments you've made. There's more on that in offset vs redraw.
Can I access equity without selling my home?
Yes, that's the whole point. Through a refinance, a loan increase or a line of credit you can turn part of your equity into usable funds while staying put, as long as your income and equity support it.
Is a reverse mortgage safe?
Australian reverse mortgages are regulated and come with a no-negative-equity guarantee, so you can't owe more than your home's value. The interest still compounds and reduces your estate though, so it's a decision to make carefully and with family.
Important information
This information is general in nature and does not take your personal objectives, financial situation, or needs into account. It is not credit assistance or a recommendation to enter into any particular credit contract. Consider whether it is right for you and seek advice before acting. Lending is subject to a lender's eligibility and approval criteria. Terms, conditions, fees, and charges apply.
Greenwood Finance · ABN 23 671 049 693 · Credit Representative No. 551942.
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