What is a home equity loan?

Author

MyProperty

A home equity loan is a financial product that allows homeowners to borrow against the equity in their property. Equity, in this context, is the difference between the market value of your home and the outstanding balance on your mortgage.

For example, if your property is valued at R1,200,000 and your mortgage balance is R1,000,000, you have R200,000 in equity. Home equity loans enable you to access a portion of this equity, providing you with a lump sum that can be used for various purposes, such as home renovations, paying tuition fees, or reducing other debts.

This type of loan is essentially a way to leverage the value you've built in your home over time.

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