Can You Use Home Equity as a Down Payment for a Second Home?
Conventional loans require a 20% deposit. Homebuyers who cannot provide it incur the lender’s mortgage insurance fee. Otherwise, they can apply for a low deposit or no deposit mortgages. Homeowners have other options too. They can use their property’s home equity as a deposit. Essentially, you place your home as collateral. Lenders accept it because your home has value on the market. Thus, they can recoup their losses if things go sideways.
Home equity is one reason why the Australian government helps first-time homebuyers become homeowners. It’s the road to building wealth. As a homeowner, you can leverage it in financially savvy ways. Plus, lenders acknowledge it as a financial tool.
Mortgage House has a history of pushing innovation forward in the lending market. Our loan specialists have the tools to assess all mortgage applications efficiently. Then, they match the applicant’s goals and financial circumstances with the most appropriate products.
We accept home equity as a deposit on a second home purchase. Plus, we offer mortgages tailored to this property acquisition type. For example, you might qualify for our:
- Advantage – 2 Years Fixed
- Fix & Save – 3 Years Fixed
- Essentials Low Rate Home Loan 90
Plus, we offer several online tools such as our car loan calculator.
Home Equity and Second Home Down Payment Conclusion
Homeowners can use their primary residence’s home equity as a down payment on a second home purchase. To ensure the viability of the solution, contact our Mortgage House loan specialists. They will walk you through the process and offer financial product options.