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O Bee Blog

Leveraging "Good Debt"

Debt is bad. You’ve heard this piece of advice repeated many times. However, there’s one very notable exception, and you’re living in it. The money you owe on your home is often called “good debt” and it comes with several advantages.

  1. The debt you owe on your home is secured. That is, your ability to repay the debt is ensured by the value of the property.
  2. The effective interest rate of home debt is lower than advertised. Your home will likely appreciate in value. For example, the value of appreciation of real estate in the South Sound has been 15% on average in the past year.
  3. It reflects responsibility. Creditors take the presence of installment loans, like mortgages, as signs of responsible use of credit. A consistent repayment history looks very favorable to potential lenders and credit scoring entities.


If you’re a homeowner, you can reap the benefits of “good debt” by taking advantage of a “home equity line of credit” or HELOC, to pay for a variety of expenses. HELOC loans generally offer lower interest rates and they work like a credit card with your credit limit based on your home equity. You only pay back what you use.

Let’s take a look at a few ways our members are using their HELOC to improve their lives and financial well-being.
• Financing home improvements, such as updating a kitchen or repairing a leaky roof
• Debt consolidation, to pay down high interest credit cards
• Major purchases, like a new hot water heater or an RV
• Covering emergency expenses, such as unexpected medical bills.

If you’re interested in a HELOC loan, O Bee Credit Union is currently offering a limited time NO FEE, NO CLOSING COST special on HELOCs. Find out if this loan is right for you. Learn more here.



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