Also known as a revolving line of credit, these loans have become popular due to their flexibility and features.

A line of credit home loan is a credit facility secured with a first mortgage on a residential property. Similar to a credit card, they allow you to withdraw funds up to a set limit at any time. Repayments can be made in full or on a monthly basis.  The minimum required repayment is the interest, though in some cases, this may be capitalised within the credit limit.

This type of loan can be used to purchase most types of assets, from the family home to an investment property or even shares and managed funds. As long as you make the minimum monthly repayments, you can use the line of credit for anything you like.  In some cases, the interest rates are marginally higher than a standard residential home loan and can also be split into several components to allow for simpler accounting.