HELOC alternatives for school fees

School fees are changing - your plan should too

From January 2025, VAT will be added to private school fees in the UK. For many families, that could mean a rise of around 20% on top of already significant termly bills. If your budget was finely balanced, the impact is immediate and material. The question is not simply how to pay the next invoice, but how to finance education sustainably across several years without jeopardising your broader financial goals.

A Home Equity Line of Credit (HELOC) offers flexibility by letting you draw funds as needed, paying interest only on what you use. In practice, it can suit termly bills. Yet it is not the only route. Dedicated flexiplans tailored for school fees, fixed home equity loans, homeowner loans with redraw features, or a strategic remortgage can all help smooth the VAT shock. For forward planners, ISAs and diversified investments still play a crucial role, while unsecured loans may bridge short gaps at a higher cost.

Choosing the right option means weighing interest rates against flexibility, considering how long you need funding, and understanding the risks of securing borrowing against your home. It also means looking beyond the next term and mapping costs for the full duration of schooling. A clear-eyed plan can preserve savings, keep retirement on track, and help you navigate fee inflation with confidence.

At Kandoo, we connect UK borrowers to specialist lenders and trusted brokers. Our role is to help you compare options side by side so you can pick the solution that fits your timeline, property equity, and appetite for risk. The right funding structure can turn unpredictable bills into predictable payments - and that control is invaluable when fees move faster than salaries.

Understanding APR is not just about percentages - it is about what you will pay in real terms over the life of your child’s education.

Who benefits from a smarter funding mix

If you are a GB homeowner facing higher independent school fees from 2025, and you want predictable payments without raiding ISA savings, these solutions merit attention. They also suit parents with uneven income, bonus cycles, or termly cashflow gaps. Even if you prefer to avoid secured borrowing, knowing the full landscape helps you negotiate better with your school or time your investments more effectively. Families with growing home equity, or those nearing the end of fixed-rate mortgage deals, may find refinancing or specialist lines particularly compelling.

Your menu of options

1. HELOC from UK specialists - draw each term, pay interest on what you use.

2. Flexiplan for school fees - interest-only on drawn termly amounts, designed for education bills.

3. Fixed home equity loan - one-off lump sum with fixed repayments over set terms.

4. Homeowner loan with redraw feature - lump sum now, potential to re-access after repayments.

5. Remortgage or refinance - release equity at competitive rates for multi-year fees.

6. ISAs and diversified investments - tax-efficient saving for future fees, no debt.

7. Unsecured personal loan - quick access for smaller gaps, higher rates.

8. School payment arrangements - staged plans or bursaries where available.

Cost, impact, returns and risks at a glance

Who typically qualifies, and how Kandoo can help

Eligibility varies by lender, but UK HELOCs, flexiplans, and homeowner loans usually require you to be a GB resident, over 18, with sufficient equity and a property secured in England, Scotland, Wales, or Northern Ireland. Lenders assess income, outgoings, credit history, and the loan-to-value ratio on your home. If you are remortgaging, your existing mortgage terms and early repayment charges matter. For flexiplans or redraw facilities, lenders look for regular income and a sensible repayment path aligned to termly draws.

If your credit is imperfect, do not assume the door is closed. Specialist brokers can route applications to lenders comfortable with complex cases, self-employed income, or multiple properties. Kandoo works with a broad panel so you can compare indicative terms without impacting your credit score at the initial stage. Our aim is to ensure you understand the trade-offs: lower rates with property security versus higher rates without it, and whether flexible draw periods genuinely match your fee timetable.

From idea to funding in clear steps

1. Map total fees plus VAT for the full timeline.

2. Check home equity, current mortgage rate and term.

3. Choose flexibility level - termly draws or fixed sum.

4. Get broker comparisons and indicative quotes.

5. Review fees, APRC, and early repayment terms.

6. Submit documents - ID, income, statements, valuations.

7. Receive offer, legal checks, and complete drawdown.

8. Set reminders to review rates before fix ends.

Weighing it up quickly

Before you commit

Think beyond the next invoice. Model a realistic five-year pathway, including potential fee rises and the added VAT from January 2025. If you choose flexibility, ensure your draw period spans the years you need and that the switch from drawdown to repayment is affordable. Fixed options can calm the noise, but check early repayment charges in case bursaries or scholarships change your plan. If you prefer to keep ISAs intact for retirement, a secured solution may help preserve long-term compounding. Always include total fees, valuation costs, broker charges, and legal work in your comparison. When in doubt, ask for the APRC so you can compare options on the same footing.

Alternative avenues if circumstances shift

1. Ask your school about bursaries, scholarships, or sibling discounts.

2. Arrange staged payment plans directly with the bursar.

3. Use a combination approach - partial ISA draw plus smaller HELOC.

4. Consider family gifting or loans documented for clarity.

5. Review childcare vouchers or workplace schemes where relevant.

Frequently asked questions

Q: Why consider alternatives to a HELOC for school fees? A: While a HELOC is flexible, products like flexiplans may align more neatly with termly bills, and fixed home equity loans can provide certainty. The right choice depends on how long you need funds and your risk tolerance.

Q: Will VAT from 2025 affect all independent schools equally? A: VAT is expected to increase most private school bills. Actual impact varies by school fee structure and any support available, so check your bursar’s guidance and plan accordingly.

Q: How do flexiplans differ from HELOCs? A: Both let you draw what you need. Flexiplans are designed for education fees with interest on drawn amounts and redraw flexibility. HELOCs offer a broader facility that can also cover non-school spending.

Q: Is remortgaging better than taking a separate loan? A: Remortgaging can deliver a lower rate and consolidate costs, but may extend your repayment term and include fees. A separate facility can ringfence education borrowing without disturbing your main mortgage.

Q: Do I risk my home with secured borrowing? A: Yes. HELOCs, flexiplans, and home equity loans are secured against property. If you fail to keep up repayments, your home could be at risk. Always budget conservatively.

Q: Can brokers really get better rates? A: Specialist brokers often access lender panels and negotiate terms tailored to school fees. They can save time and money, and help with complex income or credit profiles.

Ready to explore options with guidance

If higher fees are on the horizon, speak to Kandoo. We will assess your goals, compare secured and unsecured routes, and match you with UK lenders and brokers who understand education costs. A short conversation today can turn termly stress into a structured plan.

Important information

This article provides general information, not personalised advice. Borrowing secured against your home puts it at risk if you do not keep up repayments. Rates, fees, and eligibility vary. Consider independent financial advice before committing.