Home Equity Loan.

Home equity loans (also known as equity release schemes) are essentially for homeowners who have paid off their mortgage. If you have paid off your mortgage, you can choose to receive a cash lump sum by releasing capital in your home.

Home equity loans can be used for a variety of purposes; improvements to the home, to buy a new car, or for a holiday.

There are three types of equity release:

Home income plans create a monthly income, from a loan invested in a pension, which pays you an income and the interest on the loan. It is usually recommended to choose a fixed rate interest rate for this type of equity release. Home income plans are usually limited to people over 75 years.
Loans or mortgages use the equity in your home to let you borrow a percentage of its value. You pay the interest gained on the loan over a fixed period and repay the loan when the property is sold.
Home reversion is where you actually sell your home to receive the lump sum of income. You still live in the property for a nominal rent. This type of equity release is a last resort, as you don’t receive the market value for your home.