Newcastle Permanent Real Equity Home Loan
When you take out a home loan you take on a major debt, and one with larger than average monthly repayments. With a credit product so big the last thing you really want to do is to take out more credit in the form of a personal loan if money becomes tight, and you need an injection of cash.
So what are your alternatives?
One possibility is to take out a home loan that also doubles as a line of credit. Mutual building society Newcastle Permanent offer one such product called the Permanent Real Equity Home Loan. But how does it work, and is this type of borrowing safe?
The Newcastle Permanent Real Equity Home Loan
The Real Equity Home Loan is a mortgage product with a twist. Instead of being a plain loan with set repayments, this mortgage helps you buy your property, and then sits there as an active line of credit for you.
In other words there are no set monthly repayments. When you’re accepted for the product you’ll receive an agreed credit limit, and as long as you stay within this credit limit you can dip in and out of your funds as much as you desire.
The loan is linked to an everyday account so you can have your wages paid into it directly, and they’ll be reducing your debt each time you get paid. Obviously the more money you leave in the account the better because your overall debt will be coming down.
Total Control
This is a home loan that let’s you control how you borrow. There is a small monthly account maintenance fee of $9 a month, but this is quite low compared to what you’d pay for some of the High Street premium bank accounts.
Apart from the $9 fee the only other charge you need to worry about is the set-up fee of $500, and this is paid on the arrangement of your loan.
If your credit rating is very good you could even be able to borrow up to 90% of the property value. This would give you a rather large amount of credit to pull from if you needed to.
Something to Consider
Being from popular independent lender Newcastle Permanent, the rates and terms offered with this product are great value, but there is something you should consider when taking a product like this.
Whilst it’s incredibly useful having constant access to the equity in your home you mustn’t lose sight of the fact that the loan must be repaid in full at some point. The product is secured on your home and at some time in the future you’ll need to repay the debt or sell your property.
You should use the credit you have sparingly, and shouldn’t see it as money you can take whenever you please. The longer you hold the debt the more you’ll be paying in interest, and the longer it will take to repay the loan.
For this reason this type of home loan should really only be taken on by those who are very financially disciplined. If that sounds like you, and a line of credit home loan is what you’ve been looking for then you’d have to go a long way to find a better deal than this one.
Related posts:
- Newcastle Permanent Real Equity
- Newcastle Permanent Real Deal Home Loan
- Newcastle Permanent Real Options Home Loan
- Newcastle Permanent Real Deal Home Loan
- Newcastle Permanent Premium Plus Package LOC
- Newcastle Permanent Intro Rate Home Loan
- Newcastle Permanent Premium Plus Package Home Loan
- Newcastle Permanent Fixed Rate Home Loan
- Newcastle Permanent Premium Plus Package LOC $750k plus
- Newcastle Permanent Bridging Home Loan
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