Finance & Sell My New Car

Using your mortgage as car finance

Would you be better off to use your mortgage to finance a car? That’s the question homeowners are likely to consider when in the market for a new set of wheels.

With mortgage interest rates generally lower than for car finance you might be wondering how you could leverage your mortgage to buy your car.

Redrawing from your mortgage

If you’re ahead on your mortgage repayments then you might have accumulated a ‘nest egg’ you can redraw to fund buying a car. There are both positives and negatives to consider before doing this.


Convenience – By using your home finance, you’ll still have only one regular loan repayment to manage rather than two.

Speed – Depending on your lender, redraw can be organised very quickly. Unlike getting a loan from scratch you won’t need to verify income or get credit checks.

Affordability – If you can’t afford to allocate more money to making loan repayments right now (for example, if your a family has temporarily dropped to one income), redrawing from your mortgage could give you the flexibility to buy a car without increasing your minimum loan repayments.


Cost – While the interest rate may be lower, the size of the debt and the effect of compound interest over time means you may pay more total interest by financing your car through your mortgage.

However, this extra interest could be offset by making extra repayments.

Keeping track

If you like to keep your expenses separate so you can choose what you repay and when, lumping new costs into your mortgage will limit this.