Best HELOC alternatives for homeowners

Unlocking equity in the UK without a HELOC

In the UK, you will not find a like-for-like Home Equity Line of Credit. Instead, homeowners turn to a set of regulated products and practical strategies that can deliver similar outcomes: access to funds secured against your property or generated from it. Choosing the right route is about more than rates. It is about how quickly you need the money, whether you want to keep your current mortgage deal intact, and how comfortable you are with monthly repayments.

Second-charge loans sit alongside your existing mortgage rather than replacing it. They can be faster to arrange than a full remortgage and let you borrow larger sums if you have sufficient equity, but they usually price higher than the sharpest remortgage rates. Remortgaging, by contrast, can be cost-effective if you are happy to switch your main deal and pass new affordability checks. Over-50s might consider a retirement interest-only mortgage, which keeps payments to interest only while preserving the capital owed. For those ready to reshape their lifestyle, downsizing releases equity without taking on new debt at all.

There are also non-debt routes worth weighing. The Rent a Room Scheme can produce tax-free income from a spare room, easing the need to borrow. Local authority grants can fund essential adaptations, particularly for accessibility or energy efficiency, reducing out-of-pocket costs. Smaller projects might be better served by an unsecured personal loan to avoid putting your home at risk. A more specialist choice is home reversion, where you sell a share of your property for a lump sum while retaining the right to live there.

The smartest option is the one that matches your goal, timescale and risk tolerance - not just the headline rate.

If you need a measured view, a whole-of-market broker like Kandoo can help you compare these paths side by side, clarify eligibility, and set expectations on timings, fees and total cost over the life of the borrowing.

Who should consider these routes

If you are a UK homeowner looking to fund improvements, consolidate costlier borrowing, support family, or adapt your home for later life, these alternatives can help you access value tied up in your property. They suit borrowers who value transparency on costs and need to balance speed with total cost. Over-50s and retirees may prefer options that preserve inheritance or limit monthly outgoings, while younger households might prioritise flexibility and keeping an attractive mortgage rate intact. If you are unsure which way to go, seeking advice before committing can save both time and money.

Your main choices at a glance

1. Second-charge homeowner loan - borrow against equity without changing your current mortgage deal.

2. Remortgage to release equity - switch your mortgage and draw a lump sum at competitive rates.

3. Retirement interest-only (RIO) mortgage - over-50s pay interest only, capital repaid on sale or later event.

4. Downsizing - sell and buy a cheaper property to free capital without new debt.

5. Rent a Room Scheme - earn up to £7,500 tax-free per year from a furnished spare room.

6. Disabled Facilities Grants and local schemes - means-tested help for adaptations and efficiency.

7. Unsecured personal loan - quick funding up to around £25,000 without putting your home at risk.

8. Home reversion plan - sell a share of your home for cash, continue living there rent-free.

What it could mean for your budget

Who is likely to qualify

Lenders will focus on equity, income, credit history and property value. For a second-charge loan, you will usually need solid equity in a UK property, demonstrate affordability under current rules, and agree to a legal charge sitting behind your main mortgage. Remortgaging requires a new affordability assessment and may be constrained by early repayment charges or age caps set by the lender. RIO mortgages target over-50s with sustainable income to service interest payments for the long term.

Where borrowing is not ideal, grants can be accessed through your local authority following a needs and means assessment, often coordinated with health and social care teams. The Rent a Room Scheme is open to resident landlords across the UK for furnished rooms, though you must consider mortgage and lease conditions, safety rules and insurance. If you are unsure where you fit, Kandoo can assess your eligibility across multiple lenders and scheme providers in one go, helping you avoid applications that are unlikely to succeed.

From idea to funds in simple steps

1. Define the purpose, timescale and repayment comfort level.

2. Check equity, credit file and any early repayment charges.

3. Compare options and total cost, not just the rate.

4. Gather documents - ID, income, statements, property details.

5. Apply via a broker to access whole-of-market deals.

6. Valuation and underwriting confirm loan size and terms.

7. Review offer, fees and conditions before you sign.

8. Complete, receive funds and track your budget.

Benefits and trade-offs

Read this before you commit

Rates, fees and terms vary widely, and the cheapest headline rate is not always the best choice once you factor in product fees, valuation, legal costs and how long you intend to keep the borrowing. If your existing mortgage is on a strong fixed rate, a second charge can keep that deal intact while still raising funds. If your fix is ending soon, a remortgage may deliver a cleaner, lower-cost structure. Over-50s should weigh RIO mortgages against full equity release, particularly if preserving inheritance matters. Consider how sensitive your budget is to rate changes, and plan for contingencies such as void periods if you intend to rent a room. Always check building insurance, lease, and lender permissions before letting or altering the property.

If those do not fit, try these

1. Further advance from your current lender for home improvements.

2. 0% purchase or balance transfer credit cards for small, short-term costs.

3. Green home upgrade schemes offered regionally for energy efficiency.

4. Budgeting and savings plan to stage works over time.

Frequently asked questions

Q: How fast can I access funds with a second-charge loan? A: Often within a few weeks, subject to valuation and legal checks, which can be quicker than a full remortgage in many cases.

Q: Will remortgaging increase my monthly payments? A: It can. If you release equity or move to a higher rate, payments may rise. A broker can model payments before you switch.

Q: Is a RIO mortgage the same as equity release? A: No. You pay interest monthly with a RIO, keeping the capital steady. Traditional equity release rolls up interest with no monthly payments.

Q: Can I use the Rent a Room Scheme if I have a mortgage? A: Usually yes, but check your mortgage terms, lease conditions and insurance. Safety and licensing rules must be met.

Q: Are grants only for disabled adaptations? A: Disabled Facilities Grants are common, but councils may also support energy efficiency or safety works depending on local schemes.

Q: What credit score do I need for an unsecured loan? A: Lenders set their own criteria, but stronger credit typically secures better rates and higher limits up to around £25,000.

What to do now

If you want tailored guidance, speak to Kandoo. We compare second charges, remortgages, RIOs and more across the market, outline true costs, and handle the paperwork so you can move forward with confidence.

Important information

This guide provides general information, not personal advice. Borrowing secured on your home puts it at risk if you miss payments. Product availability and eligibility vary. Consider professional advice before making financial decisions.