Re: What’s the difference between cash out and equity release?
Posted: Wed Oct 30, 2019 6:13 pm
Hello Kenna. Welcome to the forums.
An equity release is a top up on your current home loan whereas a cash out is when you release equity from your from your home using an equity loan.
With cash out, your current home loan is refinanced to a larger mortgage, providing you with funds equal to the increase in your mortgage amount. An equity release simply creates a new loan as an addition to your current mortgage.
Since cash out refinances your current mortgage, you only have to repay 1 loan, whereas for equity release, you will have to manage 2 loans, the current mortgage and the equity loan.
Cash out would be a better option if you are looking to lower your interest rate on your existing mortgage, but it does come with higher fees and closing costs. Equity release is a better option if you have built up enough equity in your current property and interest rates have increased since you took out your existing home loan.
Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan.
Cheers,
An equity release is a top up on your current home loan whereas a cash out is when you release equity from your from your home using an equity loan.
With cash out, your current home loan is refinanced to a larger mortgage, providing you with funds equal to the increase in your mortgage amount. An equity release simply creates a new loan as an addition to your current mortgage.
Since cash out refinances your current mortgage, you only have to repay 1 loan, whereas for equity release, you will have to manage 2 loans, the current mortgage and the equity loan.
Cash out would be a better option if you are looking to lower your interest rate on your existing mortgage, but it does come with higher fees and closing costs. Equity release is a better option if you have built up enough equity in your current property and interest rates have increased since you took out your existing home loan.
Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan.
Cheers,