With Rismark International's Equity Finance Mortgage, the home buyer borrows up to 20 per cent of the value of the property using the equity loan. Another 75 per cent is funded by a standard mortgage (the other 5 per cent is the minimum deposit required by Rismark's partner, Adelaide Bank).

An important feature of the product is that home buyers always retain ownership of their house and the equity mortgage can be repaid in full at any time.

Borrowers do not make any interest repayments on the equity loan. By using an equity product to fund part of the purchase, the home buyer pays less in mortgage repayments. That allows the buyer to borrow more and buy a higher-priced property than they otherwise could.

When the house is sold, the home buyer must repay the equity loan plus up to 40 per cent of any capital gains. Rismark also wears up to 20 per cent of any capital losses.

It seems a reasonable assumption that house prices in Sydney and Melbourne will grow by an average 5 per cent a year over the next several years. After the house price boom that ended in 2003, and with higher interest rates on the way, it's hard to see house prices outstripping wages growth.

Dennis Orrock, general manager of researcher InfoChoice, has run some figures to see how home buyers will fare.

Although the buyer must give up to 40 per cent of capital gains, he or she saves on the interest costs of the equity mortgage.

Orrock assumed a 25-year mortgage with an interest rate of 7.5 per cent. He assumed the interest saved on the mortgage was invested at 6 per cent.

On a $550,000 house that grows in price by an average 5 per cent a year, Orrock says, on selling the house for $705,800 after five years, the owner will be about $15,000 worse off going the equity mortgage route. In 10 years he or she will be $31,000 worse off.

But at lower growth rates over fairly short time periods, home buyers using the equity mortgage will be ahead.

With the same $550,000 house, but with an average annual price growth rate of 3 per cent, the home buyer will be $12,000 better off going the equity mortgage route after five years. If the house is sold after 10 years the home buyer is $34,000 better off.

The point is home buyers whose house prices grow by less than 4 per cent a year over five years are likely to be better off taking an equity mortgage.

For home buyers who experience price falls that is unequivocally the case, as Rismark wears 20 per cent of the loss. However, anyone expecting to do a better than average annual growth rate than that may be better off sticking with the standard mortgage.

But, if you are pessimistic on property prices, then the equity mortgage is free money, because no interest is charged on the loan.

Also, the higher the interest rate paid on the mortgage, the less there will be in net capital gains and the more favourable to the home owner the equity mortgage becomes.

The equity mortgage is a flexible product and the risks are clearly explained. Those who take the option can switch out of it at any time.

It will be of benefit to those struggling to enter the property market as its boosts their buying power by up to 25 per cent and that means higher capital gains than they would otherwise have. As the managing director of Rismark, Christopher Joye, says, if the expectation of house price growth in any particular property market is, say, 4 per cent a year, by definition, nearly half of home buyers will be experiencing price rises of less than that and could be better off using an equity mortgage.

In any financial product, complexity is itself a potential hazard for consumers. Anyone thinking of taking out an equity mortgage must have a very clear understanding of how it works.

Rismark's product is available only to those buying established houses in large metropolitan areas. The equity loan must be paired with an Adelaide Bank loan, at least initially, but the latter loan can be re-financed later.

Any fees that apply, such as deferred establishment fees on switching lenders, must be scrutinised closely.

But the real sting in the tail of Rismark's loan product is the handing over of up to 40 per cent of any capital gain. It will be interesting to see which aspiring property owners Rismark takes on board and which it knocks back.

Perhaps, if it is overly keen for you to come on board, that may be a sign you should be contemplating other options and keep 100 per cent of the capital gain to yourself.