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Sunday 18 February 2024 09:12:47 GMT
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A revolving credit can be one of the most powerful mortgage tools available… but only if you’re disciplined. Think of it like a giant overdraft secured against your home. Every dollar sitting in that account reduces the amount of your mortgage you’re paying interest on. Example: 🏠 Mortgage: $500,000 💰 Savings: $100,000 If that $100k sits in your revolving credit, you’re only paying interest on $400k instead of $500k. The beauty is you still have access to your money if you need it. But here’s the part most people miss 👇 Let’s say you have a $500k mortgage and a $100k revolving credit facility. You put $50k of savings into the account. Now you’re effectively paying: • Interest on $400k at your normal home loan rate • Interest on $50k at the revolving credit (floating) rate • The remaining $50k is being offset by your savings So you’re only saving interest on the money that’s actually sitting in the account. That’s why revolving credits work best for people who keep a healthy emergency fund, save consistently, or regularly have cash sitting in their accounts. If you’re likely to spend the money, you’re often better off with a standard mortgage. Used properly, a revolving credit can reduce your interest costs, improve cashflow, and help pay off your mortgage faster. It’s not a magic trick. It’s just understanding how the banks’ products actually work. Not financial advice. Mauri ora 🤙  #MaoriInvestor #nzpropertyinvesting #newzealandrealestate #firsthomebuyernz #mortgagehacksnz
A revolving credit can be one of the most powerful mortgage tools available… but only if you’re disciplined. Think of it like a giant overdraft secured against your home. Every dollar sitting in that account reduces the amount of your mortgage you’re paying interest on. Example: 🏠 Mortgage: $500,000 💰 Savings: $100,000 If that $100k sits in your revolving credit, you’re only paying interest on $400k instead of $500k. The beauty is you still have access to your money if you need it. But here’s the part most people miss 👇 Let’s say you have a $500k mortgage and a $100k revolving credit facility. You put $50k of savings into the account. Now you’re effectively paying: • Interest on $400k at your normal home loan rate • Interest on $50k at the revolving credit (floating) rate • The remaining $50k is being offset by your savings So you’re only saving interest on the money that’s actually sitting in the account. That’s why revolving credits work best for people who keep a healthy emergency fund, save consistently, or regularly have cash sitting in their accounts. If you’re likely to spend the money, you’re often better off with a standard mortgage. Used properly, a revolving credit can reduce your interest costs, improve cashflow, and help pay off your mortgage faster. It’s not a magic trick. It’s just understanding how the banks’ products actually work. Not financial advice. Mauri ora 🤙 #MaoriInvestor #nzpropertyinvesting #newzealandrealestate #firsthomebuyernz #mortgagehacksnz

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