If you're a homeowner with a property worth more than your current mortgage loan, you can take out a bigger mortgage - possibly at a more favourable rate - and pocket the extra cash. This 'equity release' lets you finance a new car, a dream holiday or whatever.
With low interest rates on home loans, equity release sounds great. But:
- There can be arrangement, survey and legal fees to pay.
- You'll still be repaying the mortgage when the car is a distant memory!
- Interest rates could rise in the future, leaving you paying more.