CUA Equity Line of Credit

Rates and Fees verified correct on December 3rd, 2016

Equity is an important asset, both as an indicator of net worth and as a tool for building personal wealth. CUA's equity line of credit could help you make the most of your investment opportunities.

As soon as you start paying off your home, you start building equity in your home loan. This means that you can start owning a part of your purchase. Each additional repayment increases the stake – or equity. This stake represents the kind of personal wealth against which CUA grants their Equity Line of Credit.

An equity line of credit is a lump sum from which you can withdraw whenever and however you wish. This kind of credit option could be ideal for expanding property and other investment portfolios. It is especially lucrative if your property value increases, as this means increased equity and access to a bigger line of credit.

Interest Rate Max Insured LVR Max LVR
Variable Rate
5.56% p.a.
Comparison Rate
80% 80%
Product NameCUA Equity Line of Credit Home Loan
Interest Rate TypeVariable
Comp Rate^ (p.a.)
Minimum Loan Amount$10,000
Maximum Loan Amount$3,000,000
Maximum LVR80%
Maximum Insured LVR95%
Mortgage Offset AccountNo
Mortgage 100% OffsetNo
Loan Redraw FacilityNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan PortableNo
Suitable for InvestmentYes
Extra RepaymentYes
Available as equity loan/line of creditYes
Repayment TypePrincipal & Interest and Interest Only Options
Application Fee$600
Ongoing Fees$0 p.a.
Settlement Fee$0
Discharge Fee$200

Pros

  • $0 Ongoing fee.
  • Extra repayments are available.
  • Suitable for investment.
  • You can borrow up to 95% of the property value.

Cons

  • $600 Application fee.
  • A $200 discharge fee when closing the loan.
  • No redraw facility.
  • No offset account.

Things to consider about the Equity Line of Credit

CUA's Equity Line of Credit allows borrowers up to 80% of the property's value with repayments at a interest rate. The Equity Line of Credit is like a credit card, but with a much higher withdrawal limit. Borrowers only pay interest on the amount withdrawn from the line of credit.

Always keep in mind that a line of credit home loan shouldn't be used as a credit card, but extremely carefully, as the funds you are borrowing are based on your equity. Before applying for a line of credit home loan have a think about what you'd be spending the funds on, and if need be seek the advice of a financial planner for more information.

Features of the CUA Equity Line of Credit

  • No monthly or payout fees. Borrowers pay no monthly administration fees for the Equity Line of Credit. No early payout fees are levied if borrowers choose to repay the credit in full.
  • Home loan rates for purchases. Since the Equity Line of Credit is granted against shares in property, amounts withdrawn for purchases are repaid with home loan interest rates, rather than interest rates offered with personal loans or credit cards.
  • Lump-sum payments. The Equity Line of Credit allows for lump-sum repayments without penalty.
  • Wealth creation. The more equity held in the property and the higher the property value, the bigger the line of credit to expand an investment portfolio with additional properties and company shares.
  • 80% of property value. CUA allows a line of credit to be set up for 80% of the property's value. The higher the property value, the higher the amount forwarded for the line of credit.
  • Further advances. Borrowers can apply for further advances on the Equity Line of Credit.
  • Financial flexibility. Borrowers have a certain flexibility in repaying what they withdraw. However, this kind of unlimited access to funds requires discipline and strict financial planning since the home is used as collateral.

Fees

  • Establishment fee: $600. All clients applying for home-loan credit and lines of credit are charged this fee for the administration and preparation of the loan and the relevant documentation.
  • Third-party costs. All charges incurred for solicitor services, the government's stamp fee and government registration are charged to the borrower's account.

How to apply for the CUA Equity Line of Credit

Applying the CUA Equity Line of Credit involves much of the same documentation needed for a home-loan application.

Applicants must be Australian citizens or permanent residents, over the age of 18 and able to produce proof of a regular income. Along with identification documents and proof of income, line of credit applications also require:

  • The details of what is owed on the current home loan to show equity
  • The value of additional assets like investments, savings and properties

An equity line of credit is more than just an endless supply of funds: by using property value and equity as assets, it's an opportunity to invest in personal wealth.


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CUA Equity Line of Credit Interest Rate History vs RBA Cash Rate Graph


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This page was last modified on 5 August 2016 at 17:23.

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CUA Equity Line of Credit Home Loan

  • Interest Rate

    N/A

  • Comparison Rate

    N/A

  • App Fee / Annual Service Fee

    $600 / $0

  • Max LVR

    80%

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