She's On The Money Should you use equity in your home to buy a car? And Is Asking for Trust Fund Cash the New First-Birthday Trend?
Oct 2, 2025
Can you leverage home equity to buy a car, or is it a slippery slope into debt? The hosts break down the pros and cons, examining interest rates and smart repayment strategies. Plus, a listener's birthday invite sparks a fiery debate about asking for trust fund contributions instead of gifts. Is it a savvy financial move or a cringeworthy trend? Emotions run high as they navigate the fine line between practicality and sentimentality. Expect laughs, lively discussions, and money wins that might just inspire you!
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Pay Equity Back Quickly
- Calculate whether you can realistically repay the borrowed equity within 3–5 years rather than stretching it over the remaining mortgage term.
- Make extra repayments to avoid paying decades of interest on a depreciating asset like a car.
Why Equity Borrowing Is Cheaper
- Using home equity usually gives a lower interest rate because the loan is secured against the property.
- Secured debt is cheaper since the bank can recover funds by selling the asset if you default.
Compare Lifetime Interest Costs
- Compare total interest costs over realistic repayment periods for both options instead of only comparing headline rates.
- Choose the option with the lower lifetime cost given how quickly you will repay the car.