If you’re a homeowner thinking about unlocking the value in your property, you’ve likely come across two options: a Home Equity Line of Credit (HELOC) and Equity Release. Both let you access equity from your home, but they’re built for very different needs. Understanding how they compare is key to making a confident decision that suits your financial goals.
What is a HELOC?
A HELOC is a flexible credit facility secured against your home. It works like a credit card backed by your property. You’re approved for a borrowing limit and can draw money as and when you need it. You only pay interest on what you use, and you’ll need to make monthly repayments.
At Selina, our HELOC is designed to help homeowners:
- Keep their existing mortgage
- Borrow flexibly over time
- Avoid early repayment charges
- Access lower rates than credit cards or unsecured loans
Learn more about the Selina HELOC
What is Equity Release?
Equity Release is typically for older homeowners, aged 55 and over. It lets you take a lump sum or regular payments from your home’s value without monthly repayments. The money is repaid when the property is sold, usually after you move into long-term care or pass away.
There are two main types:
- Lifetime mortgage: you borrow against your home, with interest added over time. The loan is repaid when the home is sold.
- Home reversion plan: you sell part of your home to a provider in exchange for cash. They get their share when the property is sold.
HELOC vs Equity Release: which is right for you?
Choosing between a HELOC and equity release depends on your financial situation, goals, and age.
Key Differences
- Eligibility: HELOCs are generally available to all homeowners with sufficient equity, while equity release is typically for older homeowners.
- Repayment: HELOCs require repayment during the loan term, whereas equity release often does not require repayment until you pass away or move out.
- Interest Rates: HELOCs usually have variable rates, while equity release plans can have fixed or variable rates.
HELOC vs Equity Release key differences breakdown
When to choose a HELOC
A HELOC might be right if you:
- Want to borrow flexibly over time
- Are still earning and can make monthly repayments
- Prefer to keep your current mortgage
- Need to fund projects, cover large costs or consolidate debt
Explore how the Selina HELOC works
When to choose Equity Release
Equity Release may be more suitable if you:
- Are 55 or over and not in regular employment
- Want a lump sum or top-up income without repayments
- Are happy for your home to be sold in future to repay the loan
- Understand the long-term impact on your estate
Final thoughts
HELOCs and Equity Release both unlock the value in your home, but they solve very different problems.
- HELOCs give you flexibility, control and short to mid-term borrowing power.
- Equity Release is designed for later life needs when income is lower and flexibility matters less than access to cash.
If you’re unsure which option fits your needs, start with the facts. At Selina, we make borrowing against your home clear, simple and on your terms.
Take control of your borrowing with Selina
Check your eligibility here - it won’t affect your credit score.
Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
