Home Loan

Staying in control of your debt

Consider what you’re borrowing the extra money for and how long you might keep that asset. Will it increase in value over time or will it depreciate? If you use a loan increase to fund a new car, keep in mind that you may absorb a loss when you sell, in addition to the interest you pay on the money you borrowed. On the other hand, a loan increase for renovation could add value to your home. Factor these things into your decision.

When you get a home loan top up, your lender will generally recalculate your home loan repayments based on the remaining term of your existing home loan.

But if you choose to free up equity using a side loan, you may be able to choose a different loan term to your current home loan. For example, you could choose a fixed term loan and use the set repayments as a schedule to pay down the extra amount you borrowed.

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