Make the most of your home loan: how to access extra funds

And the good news is that Discovery Bank's home loan offering is designed to give you access to that flexibility.

What are extra/ pre-paid funds on your home loan?

An access facility lets you access cash in your bond, that is beyond the basic repayment of bond + interest. For example:

• If you've been paying more than your minimum instalment on your bond, you may have access to prepaid extra funds through your access facility, or have built up equity in your home to apply for a further loan.
• If you're  switching your bond from another bank, you might add a cash-out amount over your outstanding loan to cover renovations, furniture, or other costs.
• In addition to your home loan access facility and options for further lending, you may also apply for a Revolving Credit Facility. This product offers flexible drawdowns and repayments, giving you access to additional funds when needed.

Why this feature matters

• Improves flexibility: Rather than taking out a separate loan for renovations or other big expenses, you can structure it through your home loan facility.
• Reduces cost: Funds accessed via the home loan structure or access facility may be cheaper than other unsecured credit.
• Save on interest: Secured loans, like a home loan, usually have lower interest rates. Even though the upfront costs (like attorney and registration fees) are higher than with unsecured loans, the interest you save over time is much bigger. And if you pay more than your minimum instalment, you cut down your loan balance faster, which means you'll pay even less interest. You can still access those extra funds later if you need them.

Things to check before using extra funds

• Be clear on your interest rate and any fees tied to the facility.
• Understand how the draw-down affects your overall loan balance and repayments.
• Ensure the access facility doesn't conflict with your main goal of owning your home and reducing debt.
• Plan how you will use the extra funds - home improvements or raising value of your property are good uses.

When does it make sense?

• You're already paying a low home loan rate and don't want to pay higher interest for a separate loan for home improvements.
• You want to consolidate costs into one facility under one repayment.
• You have equity in your property, or you're switching your bond and want to optimise for both cost and flexibility.

How to access additional funds with your home loan:

1. Prepaid funds - you can see what's available on your Discovery Bank app and transfer it out yourself, no applications needed.
2. Further advance - you'll need to request confirmation of the available amount from a home loan consultant, and complete the necessary documents to release the funds. It's also important to understand the transfer fees that may apply.
3. Further loan - you'll need to request confirmation of the available amount from a home loan consultant, and complete the necessary documents to release the funds. The additional loan amount will need to be registered at the Deeds Office. It's also important to understand the transfer fees that may apply which are subject to a credit assessment, and the interest rate on your overall loan may be impacted. This will be disclosed as part of the application process.

Once approved, the funds will be transferred to your Discovery Bank account, ready for use.

Learn more about further lending.

If you're planning home improvements, switching, or simply want more control over your home finance, it's worth checking how much you may qualify for. Log in to the Discovery Bank app or call 0800 07 96 97 to speak to one of our dedicated consultants to check if you qualify for extra funds.