What are Equity Loan?

Equity is the difference between the value of your property and the amount you owe on your mortgage. If your property has increased in value since you first bought it or since you last had it valued, the equity you have in the property may have increased as well. An equity loan is a way of using this equity to secure financing.

If you’re a homeowner in Australia, you may be able to use the equity you’ve built up in your property to access financing for a range of purposes, such as home renovations, debt consolidation, or investment. An equity loan is a type of loan that allows you to borrow against the equity you have in your property. Ownright Custom Finance offers a range of equity loan options to suit different needs.

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How does an equity loan work?

An equity loan allows you to borrow against the equity you have in your property. You can usually borrow up to a certain percentage of your property’s value, minus any outstanding mortgage balances. The amount you can borrow will depend on factors such as your income, credit history, and the value of your property.

An equity loan can be used for a variety of purposes, such as home renovations, debt consolidation, or investment. You will typically need to make repayments on the loan, usually on a monthly basis, and the loan will be secured against your property.

Benefits of an equity loan

An equity loan can offer a range of benefits, such as:

Access to larger amounts of financing than may be available through other types of loans

Lower interest rates compared to some other types of loans, as the loan is secured against your property
Flexible repayment options, with some equity loans allowing you to make interest-only payments for a period of time
Potentially tax-deductible interest, if the loan is used for investment purposes

Risks of an equity loan

While an equity loan can be a useful financing option, there are also some risks to consider. These can include:

The possibility of your property decreasing in value, which could affect the equity you have available and your ability to repay the loan

The risk of defaulting on the loan, which could result in the lender taking possession of your property

The potential for higher costs over the long term, as the interest on the loan accrues over time

Ownright Custom Finance equity loan options

Ownright Custom Finance offers a range of equity loan options to suit different needs, including:

Variable rate equity loans, which offer flexible repayment options and the potential for lower interest rates
Fixed rate equity loans, which offer the security of knowing your repayments won't change over the loan term
Line of credit equity loans, which allow you to access funds as you need them, up to a pre-approved limit
Reverse mortgage loans, which allow you to access the equity in your property without making repayments during your lifetime

Eligibility requirements for an equity loan

To be eligible for an equity loan with Ownright Custom Finance, you will generally need to meet the following criteria:

You must be a homeowner in Australia

You must have equity in your property
You must have a regular income
You must have a good credit history

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When you’ve tried with every other lender or bank and not been satisfied, that’s where we come in. We’ll create a tailored and customised solution for you!

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Did you know that according to recent statistics, approximately 80% of small businesses in Australia take out business loans to help fund their growth and operational costs?

How to apply for an equity loan with Ownright Custom Finance

To apply for an equity loan, you will need to provide the lender with documentation such as proof of income, proof of property ownership, and your credit score. You can also use a mortgage broker who can help you compare rates and terms from different lenders.

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