Your house is probably worth more than your mortgage
The difference between the value of a property and the amount of money outstanding on the mortgage is known as equity, and equity loans lend you money based on this value. If your house is worth £150,000 and you've still got £100,000 outstanding on your mortgage, your equity is £50,000.
Equity loans are often targeted at pensioners, and are based on the value of a house: equity is the difference between the value of your house and the outstanding balance of your mortgage. Firms such as Scottish Widows offer equity loans that enable pensioners to borrow from 20% to 50% of their home's equity, and in some cases you can borrow without making any repayments. The lender gets its money back by selling your house after your death.
Equity loans aren't just for pensioners, though: lots of lenders also offer equity loans to younger homeowners. Again, the loan is based on a percentage of your home's equity, but you make repayments just like any other loan. Such loans are essentially secured personal loans, and can usually be used to finance anything that isn't illegal. In some cases you can borrow on a percentage higher than 100%: some lenders offer loans based on 125% of your home's equity, although as you'd expect interest rates can be steep.
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