Equity Home Loans

Home equity loans used as investment?

We are little naive about finance...duh...we have about 300k in equity in our home and wondered when you release that equity to say buy a holiday/investment property...are you essentially upping your mortgage by that amount?so you actually are paying double maybe triple the repayments....pls explain

Public Comments

1. dont do it untill the market is strong .
2. HEL is a second mortgage. The interest rate is normally higher than what you would get on first mortgage. Since you have two loans to pay you the payment will go up. Exact amount is unknown due to interest rate, credit score, and income. Contact your local bank to get an estimate.
3. The only ways to "release the equity" in your home is by (1) selling it or (2) taking out a loan. If you do the latter, yes, you are in effect "upping your mortgage" by that amount. If you do it via a home equity loan (second mortgage), the interest rate will probably be higher and the term shorter than a first mortgage.