What is a HELOC?
HELOC - Home Equity Line of Credit
A Home Equity Line Of Credit (HELOC) is a popular form of finance for homeowners in the US, Canada and Australia. Selina is the first in the UK to offer a HELOC.
With a HELOC you can access the equity built in your home and unlock low rates only homeowners can get.
As a homeowner you are rewarded with lower rates compared to most other forms of unsecured personal credit (bank loans or credit cards) and greater flexibility than a remortgage.
*Representative example: A HELOC of £100,000 drawn out in full over 25 years results in 300 monthly payments of £858.28 at a variable rate of 8.75%, set at 3.75% above the Bank of England Base Rate. The total cost over the full term is £257,484.00 which includes £157,484.00 of interest, a £3,000 arrangement fee and a £1,395 product fee added to the balance. APRC: 9.68%
How the Selina HELOC works
We want to offer maximum flexibility which is why with the Selina HELOC, you can draw, repay and redraw funds for 5 years. We don't charge you for making early repayments. Whether you want to repay in part of in full, during or after the flexible period, the choice is yours and it does not incur any extra costs. Those adjustments will change your monthly repayments amount but not the duration of your term, unless you repay in full and close your account.
You do not pay interest on the funds that remain untouched (displayed in beige on the graph above). Unlike a term loan, you save the interest payments on the difference between credit limit and the balance.
Four simple reasons a HELOC could be a great option
Unlock low rates for homeowners
Withdraw funds when needed over 5 years
Make large purchases affordable
Only pay interest on funds withdrawn
Used responsibly, a Selina HELOC and a Selina Homeowner Loan can provide you with valuable advantages. However, as they are mortgages, you should consider the possible impact on your ability to secure additional borrowing against your home.
*ERCs can apply depending on the Homeowner Loan product that you get.
**Whilst from our research personal loans are generally offered over 1-5 years, some lenders do offer longer terms.
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Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
