Mortgage rates remain more than double where they sat in 2021, according to recent data [1]. Higher rates have cooled activity, but the desire to own a primary home — or a place to escape to — hasn’t gone anywhere. Second-home purchases actually rose 4.1% in 2025 [2].
Most buyers assume a traditional mortgage is the only way to finance a home. It isn’t. Depending on how your balance sheet is built, other tools may fit the situation better, such as margin, pledged asset lines of credit, and home equity lines of credit among them. Here’s how each one works, and when it tends to make sense.
Margin: fast, flexible, and built for short timelines. Margin, in its simplest form, is borrowing against a taxable investment account. It’s quick, accessible, and can carry a competitive rate — brokerages often compete on margin pricing to attract new business. That makes it a practical fit for bridge financing or a purchase that has to close on a tight timeline. It also lets you stay invested and avoid selling holdings that would trigger an unnecessary tax bill. Because the loan is tied to the value of your account, margin works best as a short-term tool with a clear repayment plan.
Pledged asset lines: borrow without unwinding your strategy. A pledged asset line lets you use your securities as collateral while your investments stay right where they are. Your long-term strategy stays intact, and you avoid triggering capital gains just to raise cash. Rates remain competitive and, depending on the lender, can be variable or fixed. Most lines are secured by a diversified basket of securities rather than concentrated positions. One caution: because the collateral is market-based, the amount you can borrow can shift as your account value moves. The trade-off in your favor is speed; a pledged asset line can often be in place in two weeks or less.
Home equity lines of credit: set it up before you need it. For many households, the home is the largest asset on the balance sheet, and prudent planning means having access to that equity before a need shows up. A home equity line of credit takes the most work of the three; underwriting is more rigorous and the timeline is longer. That’s exactly why timing matters. Putting a line in place while you’re still earning income, rather than in the middle of a purchase or an emergency, gives you a standing source of liquidity for a future home, bridge financing, or an unexpected expense in retirement.
Two more options worth knowing about. Borrowing against the cash value of a permanent life insurance policy and taking a loan from a 401(k) are also possible sources of funds for a purchase. Both come with their own rules and trade-offs, and both are worth a closer look before you rely on them.
Rates are higher than they were in the early 2020s, but higher rates don’t have to put your plans on hold. With the right structure in place, you can have liquidity ready when it’s time for your next home or vacation property — without disrupting your investment strategy or creating an unnecessary tax bill.
If you’d like to talk through how any of these solutions might work for your situation, reach out to your Alaska Wealth Advisors advisor. If you’re not currently a client, schedule a call, and we’ll help you determine whether any of these options are a good fit for your financial picture.
Dave Valdez, CWS®, CLU®, ChFC®, AIF®
Chief Strategy Officer
This material reflects the author’s opinion, is not intended to be investment, tax, or legal advice, and is provided for illustrative purposes only. Alaska Wealth Advisors is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Alaska Wealth Advisors’ investment advisory services can be found in its Form ADV Part 2 and/or Form CRS, which is available upon request.
References
[1] Trading Economics, “United States 30 Year Mortgage Rate.” https://tradingeconomics.com/united-states/30-year-mortgage-rate
[2] Redfin, “Vacation Home Mortgages Tick Up for First Time Since Pandemic Boom.” https://www.redfin.com/news/press-releases/redfin-reports-vacation-home-mortgages-tick-up-for-first-time-since-pandemic-boom/
